UNITED STATES DEPARTMENT OF JUSTICE

ENVIRONMENT AND NATURAL RESOURCESDIVISION

SUMMARY OF LITIGATIONACCOMPLISHMENTS

FISCAL YEAR 2006

CONTENTS

FOREWORD I

CRIMINAL ENFORCEMENT OF OUR NATION’SENVIRONMENTAL AND WILDLIFE LAWS 1

PROTECTING OUR NATION’S AIR, LAND, AND WATER 4

ENSURING CLEANUP OF OIL AND HAZARDOUS WASTE 9

PROMOTING RESPONSIBLE STEWARDSHIP OFAMERICA’S NATURAL RESOURCES AND WILDLIFE 11

PROMOTING NATIONAL SECURITYAND MILITARY PREPAREDNESS 14

DEFENDING VITAL FEDERAL PROGRAMS AND INTERESTS 15

PROTECTING INDIAN RESOURCESAND RESOLVING INDIAN ISSUES 22

SUPPORTING THE DIVISION’S LITIGATORS 24

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FOREWORD

It is my pleasure to present the Environment and Natural Resources Division’sAccomplishments Report for Fiscal Year 2006. The Environment and Natural ResourcesDivision brings both affirmative civil and criminal enforcement actions on behalf of our clientagencies and defends federal agencies generally when their actions or decisions are challenged incourt on the basis of our environmental public lands and resources laws. This year the Divisionachieved significant victories for the American people in each of the many areas for which it hasresponsibility. These responsibilities include protecting the Nation’s air, water, land, wildlife andnatural resources, upholding our trust responsibilities to American Indians, and furtheringimportant federal programs, including the government’s mission to ensure national security.

The Division is dedicated to the vigorous and fair enforcement of our Nation’senvironmental laws, in both the civil and criminal arenas. Such enforcement is a criticalcomponent of environmental protection and helps ensure that our citizens breathe clean air, drinkclean water, and will be able to enjoy the country’s public lands, wildlife and other naturalresources for generations to come. It also helps ensure that law-abiding businesses have a leveleconomic playing field on which to compete.

The Division's vigorous civil enforcement of our environmental laws has generatedrecord-breaking results over the past few years, and this year was no exception. In Fiscal Year2006 the Division secured more than $3.7 billion in corrective measures through court orders andsettlements to protect the nation's environment and safeguard the public's health and welfare. Therequired actions obtained by ENRD include compliance measures, land and river cleanup, state ofthe art pollution-abatement controls, training, and education that will significantly benefit thehealth and welfare of the nation. For example, the Division secured over $227 million worth ofcleanup of superfund sites, and recovered more than $140 million in past EPA costs to be used tofinance future cleanups. In addition, ENRD attorneys achieved extraordinary environmentalresults in five consent decrees with large petroleum refiners, resulting in over $2 billion in newpollution controls. With these new settlements, the Division has now brought enforcementactions against more than 80 refineries comprising approximately 77% of the nation's refiningcapacity, thereby reducing air pollutants more than 315,000 tons per year.

Fiscal Year 2006 was one of the most successful years of the last decade for the Division’scriminal enforcement of environmental laws, based on the amount of jail time and criminalpenalties imposed against corporate polluters and other environmental law breakers. This yearcourts imposed $70.4 million in total criminal penalties, including fines, restitution, andsupplemental sentences, and 65 years of jail time, the second highest figure for jail time in thepast ten years.

Although the public is generally familiar with the Division’s role as enforcer of theenvironmental laws, much of our attorneys’ time is actually spent defending a wide range offederal programs and interests. The Division has defended almost every federal agency, handlingcases that challenge such diverse and critical matters as military training programs, government

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cleanup actions, resource management programs, and environmental regulations. The Division’seminent domain and takings cases also facilitate important federal programs by enabling agenciesto acquire needed property or other rights in a fiscally responsible manner while respecting theproperty interests of citizens.

The Division currently has a docket of approximately 6,800 active cases and matters. These cases involve more than 70 different environmental and natural resources statutes,including the Comprehensive Environmental Response, Compensation and Liability Act, theClean Water Act, the Clean Air Act, the National Forest Management Act, the Federal LandPolicy and Management Act, the National Environmental Policy Act, and the Endangered SpeciesAct. The Division litigates in every judicial district in the Nation.

The Division’s exemplary record in protecting the environment, American Indian rights,and the Nation’s natural resources, wildlife, and public lands is due to the hard work of theDivision’s attorneys and staff in partnership with our client agencies, the United States Attorney’sOffices, and state and local officials around the country. The Division’s many accomplishmentsthis year reflect the professionalism and dedication with which all these people work together tocarry out the Division’s mission.

Sue Ellen WooldridgeAssistant Attorney GeneralEnvironment and Natural Resources DivisionJanuary 2007

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CRIMINAL ENFORCEMENT OF OURNATION’S ENVIRONMENTAL ANDWILDLIFE LAWS

Vessel Pollution Prosecutions. TheVessel Pollution Initiative is an ongoing,concentrated effort to prosecute those whoillegally discharge pollutants from shipsinto the oceans, coastal waters and inlandwaterways. The Division continues to havegreat success prosecuting such activity, andthese prosecutions serve as a significantdeterrent to would-be polluters.

In United States v. MSC ShipManagement (Hong Kong) Limited, thedefendant, a Hong Kong-based containership company, pleaded guilty toconspiracy, obstruction of justice,destruction of evidence, false statementsand violating the Act to Prevent Pollutionfrom Ships (APPS). MSC ShipManagement paid $10.5 million inpenalties, the largest fine in which a singlevessel has been charged with deliberatepollution and the largest criminal fine paidin an environmental case in Massachusettshistory. MSC Ship Management admittedthat crew members on the MSC Elenacircumvented required pollution preventionequipment in order to discharge oil sludgeand oil-contaminated waste directlyoverboard. After the discovery of thebypass pipe during a U.S. Coast Guardinspection in Boston Harbor, seniorcompany officials in Hong Kong directedcrew members to lie about it to the CoastGuard. Senior ship engineers also orderedthat documents be destroyed and concealed. The Chief Engineer of the ship wassentenced to serve two months in prisonand ordered to pay a $3,000 fine.

In United States v. Wallenius ShipManagement, Pte., Ltd., a Singapore shippingcompany pleaded guilty to conspiracy toviolate APPS and multiple felony counts. Under the plea agreement, the company hasagreed to pay a $5 million fine with anadditional $1.5 million payment devoted tocommunity service. The company also willserve a three-year term of probation andimplement an environmental compliance plan. Crew members on the M/V Atlantic Breeze, acar carrier vessel managed by Wallenius ShipManagement, sent a fax to an internationalseafarers’ union that they were being orderedto engage in deliberate acts of pollution,including the discharge of oil-contaminatedbilge waste and sludge as well as garbage andplastics. In addition, a bypass system hiddenin various parts of the ship had dumped oilywastes illegally for about three years.

In United States v. Pacific-GulfMarine, Inc., an American-based ship operatorpleaded guilty to violating APPS, bydeliberately discharging hundreds ofthousands of gallons of oil-contaminated bilgewaste from four of its ships through a bypasspipe. PGM admitted to circumventing the oilywater separator on four of its giant “carcarrier” ships. This case was also significantin the substantial credit given defendant for itsextensive cooperation, facilitating Divisionefforts to hold other vessel pollution violatorsaccountable.

In United States v. Stickle, theEleventh Circuit upheld the conviction of avessel owner for conspiracy to violate U.S.laws and for unlawfully operating a freightvessel as an oil transportation vessel. In 1998the defendant’s vessel had been transportingwheat from the United States to Bangladesh. En route, diesel fuel leaked from a separatestorage compartment and contaminated the

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wheat. When the Bangladeshi importerrefused the wheat shipment, the vesselowner authorized disposal of the oil-contaminated wheat on the high seas. Thecourt rejected the argument that becausethe vessel was once an oil transportationvessel, it should still be considered as such,even though it was not licensed and did notmeet current standards for carrying oil.

Prosecuting Hazardous WasteViolations, Clean Water Act and CleanAir Act Crimes, and WorkerEndangerment. The Division hassuccessfully prosecuted several companiesowned by McWane, Inc., a company thatthe U.S. Occupational Health and SafetyAdministration (OSHA) has cited forviolations hundreds of times since the mid-1990s. To date, McWane has paid nearly$20 million in criminal fines, and thenational prosecution effort against McWanehas been a centerpiece of the JusticeDepartment's worker endangermentactivities.

In United States v. Atlantic StatesCast Iron Pipe Company, a seven monthtrial resulted in guilty verdicts againstAtlantic States (a division of McWane) andfour of the five manager defendants onmultiple felony counts. Evidence adducedat trial established a corporate philosophyand management practice that led to anextraordinary history of environmentalviolations, workplace injuries and fatalities,and obstruction of justice. Atlantic Statesand the four current and former managerswere found guilty of conspiracy to violatethe Clean Water Act (CWA) and Clean AirAct (CAA); to make false statements and toobstruct the Environmental ProtectionAgency (EPA) and OSHA; and to defeatthe lawful purpose of OSHA and EPA. These five defendants also were variously

found guilty of substantive CWA, CAA,Comprehensive Environmental Reclamation,Compensation and Liability Act (CERCLA),false statement, and obstruction charges.

In United States v. Pacific States CastIron Pipe Company, a Utah division ofMcWane was convicted of making falsestatements, and sentenced to pay a $3 millionfine. The company’s vice president andgeneral manager was sentenced to serve 12months and one day for violating the CAA. InUnited States v. McWane, Inc., McWane wassentenced to pay a $5 million fine and $2.7million in community service, for conspiringto conceal illegal wastewater discharges intoAvondale Creek, from its Birmingham,Alabama facility, substantive CWA counts,making false statements and obstruction ofjustice.

In United States v. Puerto RicoAqueduct and Sewer Authority (PRASA), thedefendant pleaded guilty to a 15-countindictment charging CWA violations basedupon a 25-year history of inadequatelymaintaining and operating the island’swastewater and water treatment systems.PRASA is a public corporation of theCommonwealth of Puerto Rico created toprovide water and sanitary sewer service, andoperates the island’s entire sewage collectionand treatment system. PRASA admitted tonine counts of discharging in violation of itsNational Pollutant Discharge EliminationSystem (NPDES) permit at the nine largestpublicly-owned treatment works on the island;five counts of illegal discharges from the fivewater treatment plants that supply drinkingwater to the largest portion of the localpopulation; and one count of a directdischarge from the PRASA system to theMartin Pena Creek.

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In United States v. BezhadKahoolyzadeh, the defendant wassentenced to serve 37 months incarcerationand pay $1.29 million in restitution forcleanup costs, conspiracy, illegallytransporting hazardous waste and illegallystoring hazardous waste. The defendantillegally stored drums of perchloroethylenewaste and then shipped them tounpermitted facilities to evade state andcity inspectors.

In United States v. Ortiz, thedefendant was convicted of negligent and knowing violations of the CWA fordisposing of wastewater from themanufacture of airplane de-icing fluid intoGrand Junction, Colorado’s storm drainsystem, which flows into the ColoradoRiver. The Tenth Circuit held that theCWA does not require proof of knowledgethat a discharge will enter waters of theUnited States, in reversing the lower court. It also held that a sentencing enhancementshould have been imposed for multipledischarges.

Protecting Homeowners and Enforcingthe Clean Water Act. In United States v.Robert Lucas, a developer was sentenced toserve nine years in prison for violating theCWA by illegally filling in wetlands, andfor conspiracy and mail fraud for sellinghomes to hundreds of families despitewarnings from public health officials thatthe illegal septic systems were installed insaturated soil and were likely to fail,causing contamination of the underlyingproperty and the drinking water aquifer. Lucas’ co-defendants were each sentencedto serve 87 months in prison, and his twocompanies were ordered to pay a total of$5.3 million in criminal fines.

In United States v. Gordon Tollison,the owner and chief executive of a corporationthat owned and operated eight wastewatertreatment plants servicing housingdevelopments containing approximately 900homes was sentenced to serve one year and aday of incarceration for four CWA violations. The defendant’s plants had been in perpetualviolation of their state NPDES permits,discharging untreated or under-treated sewageinto state waterways for more than 25 years.

Enforcing the Laws Protecting Wildlife. InUnited States v. Jonathan Corey Sawyer, thedefendant was sentenced to serve 15 monthsincarceration for illegally importing andexporting more than 230 reptiles worthapproximately $30,000 during an eight-monthperiod.

In United States v. Panhandle TradingInc., two companies and their vice presidententered pleas of guilty to conspiracy to violatethe Lacey Act and conspiracy to commitmoney laundering for their role in an illegalcatfish importation scheme. The defendantsintentionally mislabeled frozen farm-raisedcatfish fillets imported into the U.S. fromVietnam to evade import duties. The schemeinvolved over a million pounds of catfishlabeled as grouper, channa, snakehead, orbass.

In United States v. Beau Lee Lewis, thedefendant was sentenced to serve 23 monthsin prison for violating the conspiracy andsmuggling statutes when he imported morethan 300 protected reptiles and amphibiansinto the United States.

United States v. Hoang Nguyeninvolved the smuggling of red snapper caughtin violation of the Magnuson StevensFisheries Act. The captain of the fishing

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vessel was ordered to serve 30 months inprison, while a crew member received asentence of 21 months for his role inconcealing and selling commercialquantities of red snapper that had beenillegally imported into the United States.

In United States v. Estremar S.A.,an Argentine company was sentenced topay a $75,000 fine for violating the LaceyAct, as well as forfeit all assets including$158,145.53 in proceeds from the sale ofPatagonian toothfish, a.k.a. Chileanseabass. The company knowingly importedand attempted to sell over 30,000 pounds ofthis toothfish which had been illegallyharvested and transported.

Combating Fraud in the AsbestosAbatement Training Industry. In UnitedStates v. ACS Environmental, Inc., thepresident of one asbestos abatementcompany was sentenced to serve 21months incarceration and pay a $1.5million fine and the president of anotherasbestos company was sentenced to servefive months in prison and pay a $1 millionfine for conspiring to defraud OSHA,EPA, and the Small BusinessAdministration (SBA). The companiespurchased 250 false training certificates fortheir employees and then directed theiremployees to do work involving asbestos,lead, and hazardous waste removal atschools and federal facilities under SBAcontracts set aside for minority-ownedbusinesses.

Prosecuting Illegal Sales of Ozone-depleting Chemicals. In United States. v. Dov Shellef, two sellers of refrigerationchemicals were sentenced on 87 counts ofconspiring to avoid excise taxes on ozone-depleting chemicals, money laundering,

wire fraud, and tax violations. Shellef wasordered to serve 70 months and his co-defendant 18 months incarceration. Bothwere held jointly and severally liable for $1.9million in restitution for taxes due ondomestic sales of the ozone-depletingchemical referred to as CFC-113. Thedefendants told manufacturers that they werepurchasing CFC-113 for export in order tobuy the product tax-free and then sold it tax-free in the domestic market without notifyingthe manufacturers or paying the excise tax.

PROTECTING OUR NATION’S AIR,LAND, AND WATER

Reducing Air Pollution from Coal-FiredPower Plants. During this past year, theDivision continued to successfully litigateCAA claims against operators of coal firedelectric power generating plants. Theviolations arose from companies engaging inmajor life extension projects on their agingfacilities without installing required state ofthe art pollution controls. The resulting tensof millions of tons of excess air pollution hasadversely affected human health, degraded forests, damaged waterways, andcontaminated reservoirs. In June 2006, theDivision obtained a partial settlement inwhich Alabama Power Company agreed toinstall and operate state-of-the-art pollutioncontrols at two units, to purchase and retire$4.9 million in sulfur dioxide (SO2) emissionallowances allocated under the acid rainprogram, and to pay a $100,000 civil penalty. And in July 2006, the court entered a consentdecree with Minnkota Power Cooperativewhich will substantially reduce air pollutionfrom SO2 and nitrogen oxide (NOX) eachyear from the two coal-fired units at itsfacility through the installation of pollutioncontrol measures estimated to cost in excessof $100 million. Minnkota and Square Butte

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will also pay a civil penalty of $850,000and spend at least $5 million onenvironmentally beneficial wind turbineprojects in North Dakota. The State ofNorth Dakota was a co-plaintiff in thisaction. The Division, along with co-plaintiffs Connecticut, New Jersey, andNew York, also made progress in its caseagainst Cinergy Corp. when, in August, theSeventh Circuit upheld the District Court'sruling for the United States on the keylegal test for an emissions increase underCAA regulations. This year the SupremeCourt accepted certiorari in EnvironmentalDefense v. Duke Energy Corp., a case thataddresses whether, under EPA regulationsgoverning the Clean Air Act's Preventionof Significant Deterioration program,changes to a plant that increase total annualemissions, but do not increase hourlyemissions, constitute a “modification”under the CAA. The United States filedbriefs in support of the total annualemissions regulatory standard.

Settlements achieved to date withoperators of coal fired power plants willultimately remove more than a million tonsof pollutants from the air a year.

Addressing Air Pollution from OilRefineries. The Division also continued tomake significant progress in its series casesaimed at CAA violations within thepetroleum refining industry. During thepast year, consent decrees were entered inan additional five enforcement actionsagainst Exxon Mobil Corp., ConocoPhillips Co., Valero Energy Corp.,Sunoco Refinery, Inc., and ChalmetteRefining, LLC. The Exxon Mobilsettlement addresses all six domesticpetroleum refineries owned by ExxonMobil and ExxonMobil Oil Corporations.

The decree requires installation of controlsthat will reduce air pollutant emissions bymore than 51,000 tons per year, at a cost ofapproximately $537 million. The companywill also pay a $7.7 million civil penalty, andanother $6.7 million for environmentallybeneficial projects near the refineries. TheUnited States was joined in this settlement bythe States of Illinois, Louisiana, and Montana.The ConocoPhillips settlement covers ninerefineries in seven states representing morethan 10% of total domestic refining capacity.Under the decree, ConocoPhillips will installan estimated $525 million in pollution controltechnology expected to reduce annualemissions of NOx and SO2 by more than47,100 tons per year, pay a civil penalty of$4,525,000, and perform $10.1 million insupplemental environmental projects. TheUnited States was joined in this settlement byco-plaintiffs Illinois, Louisiana, New Jersey,Pennsylvania, and the Northwest Clean AirAgency of Washington. In the Valerosettlement, the settling companies willimplement more than $700 million inpollution control technologies that will resultin emission reductions of over 20,400 tons peryear, pay a civil penalty of $5.5 million, andspend $5.5 million to implement facility andcommunity-based supplementalenvironmental projects. Under its settlement,Sunoco will install $285 million in pollutioncontrol technologies at its refineries inPhiladelphia (PA), Marcus Hook (PA),Toledo (OH), and Tulsa (OK), pay a $3million civil penalty, and perform $3.9million in supplemental projects. Finally, thesettlement with Chalmette requires theinstallation of approximately $34 million inair pollution controls at a refinery inChalmette, Louisiana, payment of $1 millionin civil penalties, and performance of $3million in environmental projects. The States

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of Illinois, Louisiana, and Montana joinedthe United States as co-plaintiffs in thisaction.

With these additional settlements,the Division has now addressed more than80 refineries, comprising approximately77% of the nation’s refining capacity, andwill reduce air pollutants by more than315,000 tons per year. In related cases, theDivision also completed civil enforcementactions under the CAA and CWA againstMotiva Enterprises LLC, anotherpetroleum refiner. The civil action was acompanion to a criminal case andconcerned a fatal 2001 explosion and fireat a Motiva oil refinery in Delaware. Under the consent decree, Motiva will paya $12 million penalty that will be sharedwith our co-plaintiff, the Delaware NaturalResource and Environment Commission,and spend at least $3.96 million onenvironmental projects. The new owner ofthe refinery, The Premcor Refining GroupInc., now a subsidiary of Valero, alsoagreed to implement enhanced safetyprocedures estimated to cost about $7.5million.

Reducing Air Pollution at Other DiverseIndustrial Facilities. The Division alsoimproved the nation’s air quality throughenforcement actions against numerousother facilities operating in diverseindustries, including methyl methacrylateand acrylic sheeting facilities (U.S. v.Lucite International Inc.), polystyrenefoam manufacturing facilities (U.S. v. AtlasRoofing Corp.), rubber tractor treadsmanufacturing facilities (U.S. v.Caterpillar and Camoplast Rockland,LTD), ethanol production (U.S. v. Cargill,Inc., U.S. v. MGP Ingredients of Illinois,Inc.), grocery store refrigeration units

(U.S. v. Newly Wed Foods, Inc.), polyvinylchloride (PVC) manufacturing facilities (U.S.v. Formosa Plastics Corp., U.S. v. OxyVinyls,L.P.), hazardous waste treatment, storage anddisposal facilities (U.S. v. Clean HarborsEnvironmental Services), and pulp and papermills (U.S. v. Weyerhaeuser Company,Willamette Industries, Inc.). Those efforts,addressing similarly diverse CAA violations,resulted in commitments by defendants toperform more than $535 million in facilityimprovements, to undertake SEPs valued at$6.8 million to benefit local communities, andto pay more than $4 million in civil penalties. The States of California, Illinois, Delaware,New Jersey, and Louisiana joined the UnitedStates as co-plaintiff in one or more of theactions listed above. Just one of thesesettlements, which involved ethanolproduction (Cargill), will result in a reductionof an estimated 25,000 tons per year ofharmful air emissions at 29 of defendant’sfacilities in thirteen states. The states ofAlabama, Georgia, Illinois, Indiana, Iowa,Missouri, Nebraska, North Carolina, NorthDakota, and Ohio, and counties in Tennessee,Ohio and Iowa, were Plaintiff-Interveners andsignatories to the consent decree.

Controlling Contaminated Storm WaterRun-off. The Division also directedsignificant effort toward assuring thatcompanies comply with the CWA’sprovisions governing the discharge of stormwater, a significant source of environmentalharm because of the pollutants it may contain. In January 2006, the District Court for theDistrict of Hawaii entered a consent decreewith the Hawaii Department of Transportation(HDOT) resolving CWA violations resultingfrom discharges along HDOT’s roadways,construction projects, and at three airports. The consent decree requires HDOT toundertake comprehensive corrective

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measures, at an estimated cost of $60million over the next five years, to achievecompliance with the CWA. HDOT willalso pay a $1 million civil penalty andperform $1 million in environmentalprojects in the affected communities. InJune 2006, the same district court entered aconsent decree with an Hawaiian propertydeveloper in U.S. v. James H. Pflueger,resolving defendants’ illegal discharges ofstorm water, sediment discharges, andplacement of unpermitted fill in streamcourses from construction activities on theIsland of Kaui. The decree requiresdefendants to spend an estimated $6million on corrective measures, pay a $2million penalty, and perform a $200,000environmental project. The State ofHawaii joined the United States as co-plaintiff in the actions against HDOT andPflueger.

Also in June, the District Court forthe District of Idaho in U.S. v. IdahoDepartment of Transportation (ITD)entered two consent decrees resolvingstormwater violations by ITD and acontractor in connection with a roadbuilding project. Under the decrees’ terms,defendants will pay civil penalties totaling$895,000 and undertake various actions tobetter train their employees. IDT must alsoimprove its efforts to inspect for andcomply with storm water regulations. Andin August 2006, the District Court for theNorthern District of Texas entered aconsent decree in U.S. v. City of Dallas,settling allegations that the City violatedthe CWA by failing to adequately staff andimplement its storm water managementprogram. The decree requires the City toundertake comprehensive injunctive relief,pay a civil penalty of $800,000 and spend

$1.2 million on environmental projects. Texas was a co-plaintiff in this action.

Ensuring the Integrity of MunicipalWastewater Treatment Systems. TheDivision continued to protect the Nation’swaterways by ensuring the integrity andproper operation of municipal wastewatertreatment systems. In August 2006 theDivision lodged a second partial consentdecree with the City of San Diego requiring further injunctive measures to addressunlawful discharges from the City’s sewersystem at a cost of an additional $87 million. This decree follows a 2005 partial consentdecree that required the City to undertakeinjunctive relief valued in excess of $187million. In December 2005 a consent decreewas entered in U.S. v. Washington SuburbanSanitary Commission (WSSC), resolvingCWA claims against the sewage authority thatserves Montgomery and Prince George’sCounties in Maryland. Pursuant to thedecree, WSSC will spend an estimated $200million on a comprehensive set ofimprovements to control the overflow ofsanitary sewage, pay a $1.1 million penalty,and perform $4.4 million in environmentalprojects. Maryland joined the United Statesas co-plaintiff in this case. In August 2006, aconsent decree was entered in U.S. v.Metropolitan District Commission, Hartford(MDC)) under which MDC, the operator ofthe largest sewage collection system in theState of Connecticut, will upgrade the sewercollection system at a cost of more than $100million and pay a civil penalty of $850,000which will be split between the United Statesand the State of Connecticut. The injunctiverelief is intended to eliminate sanitary seweroverflows in the collection system andimprove water quality in streams in theHartford area.

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And in landmark criminal and civilenforcement actions (U.S. v. Puerto RicoAqueduct and Sewer Authority (PRASA)),the Puerto Rico Aqueduct and SewerAuthority (PRASA) agreed to pay $10million in criminal and civil fines and toperform more than $1.7 billion ininjunctive relief to resolve repeatedenvironmental violations at wastewatertreatment plants and drinking watertreatment plants throughout Puerto Rico. To comply with the settlement, PRASAwill complete a total of 145 capitalimprovement projects, including short-termand mid-term projects over the course oftwo years from the entry of the settlement.The consent decree with PRASA waslodged with the Puerto Rico District Courtin June 2006.

The Division also helped ensure theintegrity of municipal wastewatertreatment systems by concludingenforcement actions against a number ofsmaller municipalities: City of New Iberia(LA), City of Nashua (NH), City ofOkmulgee (OK), City of Chicopee (MA),and City of Brockton (MA). In theseactions, the United States securedcommitments by defendants to spend anestimated $310 million to improve theirmunicipal wastewater systems. In all ofthese cases, the States joined the UnitedStates as co-plaintiff and signed onto theconsent decree.

Ensuring Safe Drinking Water. TheDivision also achieved a significant victoryunder the Safe Drinking Water Act in theNinth Circuit. The appellate court affirmed a judgment in favor of the UnitedStates in United States v. Alisal WaterCorp., an action involving 232 violationsof the Act against five water companies

which provided water to 28,000 people inMonterey County, California. The NinthCircuit upheld the district court's orderappointing a receiver and requiring the sale ofseveral of the defendants’ systems.

Protecting the Nation’s Wetlands. InUnited States v. Lone Moose Meadows, LLC,working with the U.S. Attorney’s Office forthe District of Montana, the Divisionsuccessfully sued the developer of a ski resortin Big Sky, Montana, for the illegal filling ofwetlands. The Montana District Courtentered the consent decree in January 2006,and ordered Lone Moose Meadows to restorestreams and wetlands, create new wetlands inmitigation, and pay a $165,000 civil penalty. In another enforcement matter, United Statesv. Don Prow d/b/a Rochester Topsoil, theMinnesota District Court in April 2006entered a consent decree requiring thedefendant to pay a $250,000 civil penalty andcomply with onsite/offsite restoration andmitigation projects for the unauthorizeddischarge of fill material into approximately73 acres of wetlands in Rochester, Minnesota.

In May 2006 the Supreme Court ruledin S.D. Warren v. Maine Board ofEnvironmental Protection, consistent with theamicus brief filed by the Department ofJustice; the Court held that dams produce"discharges" and are therefore subject to Stateauthority under section 401 of the CleanWater Act.

ENSURING CLEANUP OF OIL ANDHAZARDOUS WASTE

Continuing Progress to CleanupContaminated River Systems. This yearthe Division continued to secure significantriver cleanups. In October 2005, the Division reached an agreement with the General

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Electric Company (GE), requiring it tobegin the dredging of sedimentcontaminated with polychlorinatedbiphenyls (PCBs) at the Hudson RiverPCB Superfund site in upstate New York. Under the settlement, GE will perform thefirst of two phases of the dredging and payEPA up to $78 million for the Agency’spast and future costs. The first phase willremove about 10 percent of the totalvolume of PCB-contaminated sedimentslated for dredging during the entirecleanup, at an expected cost of between$100 million and $150 million. Thesecond phase of the dredging is expected totake five years. The GE cleanup project isunprecedented in size and scope andaddresses the PCB discharges from two GEmanufacturing plants that for yearsdischarged hazardous PCBs directly intothe upper Hudson River. The goal of theproject is to restore one of the country’smost important cultural and ecologicalresources, while using approaches tominimize impacts on local communities. In February 2006, the District Court for theDistrict of Montana entered a consentdecree in U.S. v. Atlantic Richfield Co.(Milltown Reservoir Sediments) resolvingCERCLA claims against Atlantic Richfieldand NorthWestern Corporation inconnection with the Milltown ReservoirOperable Unit, one of the numerousSuperfund sites within the Clark ForkRiver Basin in Montana. Under theconsent decree, ARCO and NorthWesternwill remove the Milltown Dam andmillions of cubic yards of contaminatedsediment accumulated behind the dam, atan estimated cost of $106 million. In April2006, the Division lodged a consent decreewith NCR Corp. and Sunoco-U.S. Paper,which requires those parties to perform thefirst phase of remedial action for Operable

Unit 4 of the Lower Fox River and Green Baysite in northeastern Wisconsin. Wisconsin isparticipating as a co-plaintiff in the Fox Rivercleanup. The site is contaminated with PCBsdischarged into the Fox River from severalpaper manufacturing and recycling facilities. The site was divided into five operable unitsfor purposes of remediation and will costmore than $500 million to address overall. Phase 1 is expected to cost about $30 millionand features dredging, dewatering, andlandfill disposal of PCB-contaminatedsediments from a hot-spot of contaminationnear the U.S. Paper manufacturing plant. This is the fifth partial consent decreenegotiated in connection with cleanup of thesite.

Conserving the Superfund throughSecuring Cleanup of Hazardous WasteSites by Responsible Parties andRecovering Superfund Monies Expendedfor Cleanups. The Division secured thecommitment of responsible parties to clean upadditional hazardous waste sites, at costsestimated in excess of $227 million, andrecovered more than $140 million for theSuperfund to help finance future cleanups. Examples of some of the major Superfundcases resolved by the Division this yearinclude: U.S. v. Carrier Corp. (defendants toperform the shallow zone remedy for thePuente Valley Operable Unit of the SanGabriel Valley Superfund site, valued at $27million, and pay $800,000 in past responsecosts); U.S. v. Allegiance Healthcare Corp.;v. Lockheed Martin Corp.; v. White & WhiteProperties; v. Leach International Corp.; v.Azusa Land Reclamation Co., Inc.; v.Aerojet-General Corp.; and. v. PhaostronInstrument and Electronic Co. (seven consentdecrees with16 defendants required to pay$14.3 million in response costs and 88 percentof future oversight costs at the Baldwin Park

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Operable Unit of the San Gabriel ValleySuperfund site); U.S. v. Asarco, Inc.(developer will purchase Asarco’s TacomaSmelter Superfund site and perform siteremedy at an estimated cost of $28 millionand Asarco will pay $1.5 million toSuperfund from the proceeds of sale); U.S.v. NCH Corp. and U.S. v. FMC Corp.(defendants will pay over $26 million inpast and future costs and perform remedialwork estimated at more than $13 million atthe Higgins Farm and Higgins DisposalSuperfund sites in New Jersey); U.S. v.Dominick Manzo (judgment in favor of theUnited States for $31 million in costsincurred cleaning up the Burnt Fly BogSuperfund site, also in New Jersey). Additionally, the Division entered into asettlement agreement with Teck ComincoAmerica, Inc. (TCAI), and its Canadianparent, Teck Cominco Metals, Ltd. (TCM),requiring TCAI to perform a remedialinvestigation and feasibility study (RI/FS)at the Upper Columbia River Superfundsite. The site, consisting of 150 miles of theColumbia River and adjoining landsbetween the Canadian border and theGrand Coulee Dam, has been contaminatedby millions of tons of smelter slag andheavy metals discharged into the ColumbiaRiver from TCM's Canadian zinc and leadsmelter, approximately 10 miles north ofthe border.

The Division also achieved notablevictories on appeal in U.S. v. W.R. Grace& Co., in which the Ninth Circuit Court ofAppeals affirmed EPA’s decision to cleanup asbestos contamination in Libby,Montana that resulted from W.R. Grace’smining operations as a “removal” actionunder CERCLA instead of a “remedial”action, and the district court’s orderrequiring W.R. Grace to reimburse EPA

for $54.5 million. In U.S. v. Vertac ChemicalCorp., the Eighth Circuit Court of Appealsaffirmed that Hercules and other companieswere liable for costs associated with EPA’scleanup of hazardous waste contamination ata chemical plant site in Jacksonville,Arkansas.

Enforcing Cleanup Obligations InBankruptcy Cases. The Division’sbankruptcy practice has continued to grow. This year, the Division represented the UnitedStates in many proceedings, including theDana Corp., Delta Air Lines, Asarco, DelphiAutomotive, Saltire, Encycle, and Safety-Kleen bankruptcies, where debtors hadsignificant environmental responsibilities. The Division filed proofs of claim to requirethat at least part of debtors’ estates be appliedto the costs of environmental remediation forwhich the debtors are liable. In the EaglePicher bankruptcy, the Division secured theagreement of the debtor to deposit $13.6million into a custodial trust to be used tofund environmental cleanup work at sites inseveral states. The Division also lodgedproposed settlements in bankruptcy courts inthe Gulf States Steel, W.R. Grace, Armstrongand Saltire Industrial bankruptcies. In theseproceedings, the Division receiveddistributions this year totaling more than $6million in reimbursement of response costs. These settlements avoided abandonment ofcontaminated properties by debtors andenabled companies to avoid liquidation andloss of jobs by facilitating reorganization orsales of ongoing operations.

Recovering Natural Resource Damages. The Division obtained significant results in itsefforts to recover for natural resource damageclaims securing settlements worth more than$33 million. Some of the Division’srecovery efforts include U.S. v. Schlumberger

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Technology Corp, U.S. v. Elkem MetalsCo., U.S. v. Sunoco, Inc., U.S. v. AmericanEnergy, Inc. and U.S. v. BP AmocoChemical Co. South Carolina and Georgiajoined the United States as co-plaintiffs inSchlumberger; Ohio and West Virginiawere co-plaintiffs in Elkem Metals,Kentucky was a co-plaintiff in Sunoco, andTexas was a co-plaintiff in the case against BP Amoco. Restoration activities includedthe removal of two dams, dredging PCBcontaminated sediments behind the dams,and improving the stream corridor leadingto Lake Hartwell in South Carolina(Schlumberger); the restoration of mussels,fish, and snails damaged by releases ofhazardous substances to the Ohio River(Elkem); the preservation of at least 100acres of bottomland hardwood foresthabitat, the re-colonization of 19 acres offormer pasture with native vegetation, andthe creation of six acres of riparian wetlandin the vicinity of two Superfund sites inHarris County, Texas (BP Amoco).

PROMOTING RESPONSIBLESTEWARDSHIP OF AMERICA’SNATURAL RESOURCES ANDWILDLIFE

Implementing the President’s HealthyForest Initiative and Defending FederalForest Management Programs. TheDivision continued its string of victoriesdefending against challenges to projects torestore public forest lands, improvewildlife habitat, and recover the value ofdamaged timber on federal forest lands –projects which implement President Bush’sHealthy Forest Initiative. In Defenders ofWildlife v. Kempthorne, the Divisionprevailed in a challenge to the counterpartEndangered Species Act (ESA) Section 7consultation regulations enacted as part of

the Healthy Forests Initiative. Theseregulations empower the Forest Service andBureau of Land Management to render theirown “not likely to adversely affect”determinations concerning threatened andendangered species for specified actionswithout further process, thereby expeditingforest recovery under the Healthy ForestsInitiative.

The Division successfully defendedother forest management actions, includingtimber management on Forest Service land ingrizzly bear habitat in Swan View Coalition v.Barbouletos and the issuance of oil-and-gasleases in New Mexico v. the Bureau of LandManagement.

Tending Fire-Damaged Forests andCapturing Economic Value From Deadand Dying Timber. The Administrationmade increased active management of theNation’s forests a priority in 2006, includingdealing with the ravages of wild fires. TheDivision continued its successes in defendingagainst emergency motions for injunctiverelief in lawsuits challenging Forest Serviceprojects to salvage dead and dying trees,reduce fire risks, and secure economic valuefrom burned-over areas in the PacificNorthwest. In FSEEE v. United States ForestService, the court denied a motion foremergency relief, finding that the plaintiffswere not likely to succeed on claimschallenging the Forest Service’s interpretationof the applicable Eastside Forest Plan and itsuse of tree mortality guidelines. As a result ofthe favorable decision, the Easy FireRecovery Timber Salvage Project on theMalheur National Forest was able to proceed,and the harvest was completed, allowing forrestoration efforts and providing revenue tolocal communities. In Lands Council v.Martin, the district court also denied a motion

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for a preliminary injunction, finding thatplaintiffs were not likely to succeed onclaims under the National EnvironmentalPolicy Act (NEPA) and the National ForestManagement Act against the School FireRecovery Project on the Umatilla NationalForest. As a result of the Division'svictory, that project has been able toproceed with similar benefits. Similarly,the Division successfully defended theForest Service’s ability to use “categoricalexclusions” under the NationalEnvironmental Policy Act for timber saleprojects under 250 acres in size inAllegheny Defense Project v. Bosworth.

Defending Multiple Federal AgenciesOperating the Federal Columbia RiverPower System. The Federal ColumbiaRiver Power System, a system of dams andreservoirs on the Columbia and LowerSnake Rivers, provides over 50% of thepower for the four states in this region. These rivers are also the habitat for 13protected species of salmon. The Divisionfacilitated coordination of the clientagencies and fellow sovereigns to moveforward in complying with the 2005remand order in National WildlifeFederation v. National Marine FisheriesService and, in American Rivers v.National Oceanic and AtmosphericAdministration Fisheries, on May 23,2006, obtained a critical decision rejectingplaintiffs’ claims that the Upper Snake andColumbia River operations had beenillegally segmented, thereby protecting theSnake River Basin Adjudication agreementfrom collateral attack. In related litigation,the Division obtained dismissal onjurisdictional grounds of two casescollaterally challenging the United States’compliance with and enforcement of aCanadian salmon harvest treaty in Salmon

Spawning and Recovery Alliance v.Department of State and Salmon Spawningand Recovery Alliance v. U.S. Customs andBorder Patrol.

Restoring the San Joaquin River andSecuring Bureau of Reclamation ProjectWater Supplies. The Bureau ofReclamation’s California Central ValleyProject is one of the Nation’s major waterconservation developments. Seventy yearsago, Congress authorized construction of theFriant Division of the Project. Friant Damdiverts all but a fraction of the waters ofCalifornia’s second-longest river, the SanJoaquin – de-watering a lengthy reach of theRiver for most of the year – for storage inMiller Lake and eventual distribution,primarily for agricultural use in the CentralValley. After eighteen years of contentiouslitigation over the Bureau’s renewal of long-term water supply contracts, the Divisionnegotiated an historic settlement in NaturalResources Defense Council v. Rodgers. Thesettlement delineates a monumentalintergovernmental project by the State ofCalifornia and the Bureau of Reclamation torestore flows in 153 miles of the San JoaquinRiver, harmonizing agricultural interests insecuring irrigation water supplies withenvironmental interests in enhancing waterquality and reviving two salmon runs thatdried up when the Dam was built in the late1940s.

Defending Fisheries Legislation. TheDivision successfully defended theconstitutionality of a provision of the AtlanticCoastal Act. That Act creates a cooperativefederalism framework under which the Stateshave primary authority to regulate fisherieswithin 3 miles of shore, together with thefederal government. In Medeiros v. Vincent,lobster fisherman challenged this legislation

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under the Tenth Amendment and equalprotection clause. The First Circuitrejected this challenge and the SupremeCourt has now denied certiorari.

Protection of the Florida Everglades. The Division continues to contribute to therestoration and protection of theEverglades ecosystem – including the 1.3million-acre Everglades National Park, thelargest, most important subtropicalwilderness in North America. In UnitedStates v. South Florida Water ManagementDistrict, the U.S. District Court entered aconsent decree in 1992 requiring the Stateof Florida to restore water quality in theEverglades through regulation ofagricultural runoff and construction of vastwetland treatment systems. After morethan a year of negotiations, the Divisionthis year negotiated an agreement with theState of Florida on additional remedialmeasures to complement those specified inthe consent decree. The consent decree’sambitious strategy to restore and preservethe Everglades ecosystem – and thefederal-state collaboration that produced it– have heralded a new era ofintergovernmental cooperation on theEverglades historic $7.8 billion restorationeffort, fulfilling a top priority of the pastthree federal administrations. The Divisionthis year continued its participation in theproceedings of the South FloridaEcosystem Restoration Task Force, theintergovernmental body codified byCongress in 1996 to coordinate therestoration of the Everglades. TheDivision has also participated in theMiccosukee litigation, in which it hasdefended the joint federal-State approachto Everglades restoration.

The Division also contributes toprotection of the endangered Evergladesecosystem by acquiring lands withinEverglades National Park and Big CypressNational Preserve through exercise of thepower of eminent domain, as authorized byCongress and requested by the National ParkService. Related acquisitions on behalf of theU.S. Army Corps of Engineers took place toimprove water deliveries to the Everglades. The largest case to date is United States v.480 Acres of Land in Miami-Dade County,Florida, and Gilbert R. Fornatora, et al. Thisis the lead case in a consolidated trial groupof seven tracts totaling 1,000 acres in theEverglades National Park expansion project.

Defense of Offshore Oil and Gas LeaseSale. Domestic energy production hasbecome increasingly visible as the Nation’senergy needs grow and the role of foreignenergy increases. In Blanco v. Burton (E.D.La.), the Governor of Louisiana sought to haltan Interior Department offshore lease sale inthe western Gulf of Mexico for allegedviolations of NEPA, the Outer ContinentalShelf Lands Act and the Coastal ZoneManagement Act. The court denied theGovernor’s motion for an emergencyinjunction to halt the lease sale because shehad failed to show irreparable harm if the saleproceeded. The Interior Department andGovernor ultimately settled the case favorablyto federal interests. The Governor dropped allher claims against the lease sale in return foran Interior Department agreement to conductadditional environment analysis on the nextlease sale and future lease activities.

PROMOTING NATIONAL SECURITYAND MILITARY PREPAREDNESS

Defending Military Readiness Activities.The Navy’s use of various sonar systems for

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submarine detection has been the subject ofseveral cases. This year, the Divisionaggressively defended a challenge to theU.S. Navy's use of mid-frequency activesonar during the multi-nation Rim of thePacific ("RIMPAC") anti-submarinewarfare exercise scheduled to take placeoff the coast of Hawaii in conjunction withthe navies of 7 other countries. In NaturalResources Defense Council v. Winter,plaintiffs asserted Marine MammalProtection Act (MMPA), NEPA, andAdministrative Procedure Act (APA)challenges. During litigation of a motionfor a temporary restraining order theSecretary of Defense invoked the NationalDefense Exemption under the MMPA, butthe court still enjoined the exercise underNEPA. Despite that injunction, Divisionattorneys were able to negotiate termslimiting the injunction to a number ofmitigation measures that the Navy wasalready undertaking pursuant to itsstandard operating procedures or its marinemammal incidental harassmentauthorization, and the exercise was able toproceed.

In Ilioulaokalani Coalition v.Rumsfeld, the Division continued to defenda challenge to a critical link in the Army’s30-year, Army-wide modernization plan tomeet the national security needs of thefuture. The plaintiffs in this actionchallenged the Army’s compliance withNEPA concerning its decision to transforma light infantry division into a StrykerBrigade Combat Team at an Army trainingfacility in Hawaii. After the Ninth Circuitreversed the district court’s decisiongranting summary judgment in favor of theArmy, the Division presented argumentand evidence in opposition to the plaintiffs’request to enjoin military training and

modernization in Hawaii while the Armyworks to complete additional environmentaldocumentation required by the court forcompliance with NEPA.

Defense of Immigration and NationalSecurity Initiatives. In Sierra Club v.Gonzales (S.D. Cal.), the Division secured animportant victory upholding the authority ofthe Department of Homeland Security toundertake important initiatives at a speedappropriate to circumstances. The case wasoriginally a challenge under NEPA toconstruction of a 14-mile fence on theMexican border to deter illegal immigration. Pursuant to recently enacted authority,Secretary Chertoff waived compliance withenvironmental laws as they applied toconstruction of the fence. Plaintiffsresponded with three Constitutionalarguments attacking the waiver. In itsfavorable ruling, the court emphasized that“Congress' delegation of authority to theExecutive Branch relates to matters overwhich the Executive branch has independentand significant constitutional authority:immigration and border control enforcementand national security." The court furtherfound that the waiver authority as applied “inthe completion of a project uniquely withinthe national security and immigration policyprovinces of the Executive Branch” was notunconstitutional.

Property Acquisitions to Improve MilitaryReadiness and National Security. Asdirected by federal agencies acting underauthority of Congress, the Division exercisedthe federal government's power of eminentdomain to initiate litigation enabling anumber of land acquisitions. United States v.1,098.221 Acres in Duval County, Florida,and Gate Maritime Properties., et al., wasfiled to acquire a port facility on Blount

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Island near Jacksonville, Florida, used bythe Department of the Navy for weaponsshipping around the globe. Estimated justcompensation of $101,000,000 was madeimmediately available to the landowner;the landowner claimed compensation of$199,290,000 based on a highest and bestuse of conversion to high-end residentialdevelopment, with a marina, hotel,commercial and cruise ship terminal. Following a two week jury trial conductedlast November, the jury returned a verdictof $162,000,000 resulting in a cost savingin excess of $30,000,000.

United States v. 17.69 Acres ofLand in San Diego County, California, andNational Enterprises, et al., concerned landcondemned by the Border Patrol, via theArmy Corps of Engineers, for constructionof a second fence and patrol zone along theSan Diego-Tijuana border. In a three weektrial, held last December, defendantsargued that just compensation was$48,000,000 to $72,000,000 based on ahighest and best use of development of aNASCAR stadium. The United States'appraiser testified that the value of theproperty was $265,400 as holding forfuture industrial use. The verdict, after twodays of jury deliberation, was that justcompensation for the taking is $1,232,280,resulting in a minimum cost saving inexcess of $46,000,000.

The Division has acquired land ina number of cases to facilitate the U.S.Army's transformation of its 2nd Brigade,25th Infantry Division (Light) to a StrykerBrigade Combat Team. In the lead actionfiled last year, United States v. 1,402 Acresof Land Honolulu, Hawaii and the Estateof James Campbell, et al., the partiesreached a $15,900,000 settlement, and

related NEPA claims were held not to be adefense to a taking. The Division has alsoacquired land on behalf of the Department ofthe Navy United for encroachment protection,training, and operations at Harvey PointDefense Testing.

The Division has been workingclosely with the U.S. Attorney (E.D. La.) andhis Office, along with the Army Corps ofEngineers in New Orleans, to assist and trainthose offices in anticipation of what isestimated will be some 400 Hurricane Katrinarelated condemnations for the reconstructionand enhancement of flood control systems.

DEFENDING VITAL FEDERALPROGRAMS AND INTERESTS Defending the Department of Energy’sOperations at Its Hanford NuclearReservation. In United States v. State ofWashington, the United States succeeded inits efforts to invalidate a Washington Statevoter initiative that would have significantlyinterfered with the activities of theDepartment of Energy and the Navy inWashington State and across the country. The new state law, originally known as "I-297," and now the "Cleanup Priority Act,"sought to: (1) bar shipments of nuclear wasteto the Department of Energy's HanfordFacility – including shipments from othersites in the Department of Energy’snationwide complex as well as nuclearcomponents from the Navy’s Pacific Fleet –pending cleanup of waste currently atHanford; (2) change current storage,treatment and disposal practices at Hanfordand its associated laboratories; and (3) expandthe State's jurisdiction over radioactivematerials. After obtaining a temporaryinjunction against implementation of the newlaw, the Division largely prevailed on its

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interpretation of the law during acertification proceeding in the WashingtonState Supreme Court. The District Courtfor the Eastern District of Washington inJune 2006 granted the government’smotion for summary judgment. The courtfound that the law was preempted by thefederal Atomic Energy Act, barred bysovereign immunity, and violated theCommerce Clause. As a result, the courtheld that the law was invalid on its face,and struck it down in its entirety. This caseis now on appeal.

Defending EPA’s Clean Water ActStandards for Coal Mining. In CitizensCoal Council v. EPA, petitioners under theCWA challenged effluent limitationsguidelines and new source performancestandards for subcategories within the coalmining category. The Divisionsuccessfully sought en banc reversal of aprior adverse panel decision in which thecourt held that EPA incorrectly applied thestatutory factors in setting effluentlimitations. The Sixth Circuit granted enbanc review, and in May 2006, the en banccourt issued a favorable decision upholdingthe rule. The court reaffirmed the panel’sdecision that the Rahall Amendment –which sought to encourage remining ofabandoned mines by providing limitedexceptions from the statute’s effluentlimitation requirements – did not bar EPAfrom promulgating additional regulationsto provide for broader exceptions forremining. The court also upheld EPA’suse of best management practices (BMPs)in lieu of numerical effluent limitations, itstreatment of remining discharges that arecommingled with other waste streams, andits decision to set the effluent reductionattainable at remining areas at zero.

Upholding EPA Actions Implementing theMontreal Protocol. In Natural ResourcesDefense Council v. EPA, the Divisionsuccessfully defended EPA’s approval of the2005 critical use exemption for the ozone-depleting substance methyl bromide. InAugust 2006, in a revised decision the D.C.Court of Appeals held that NRDC haddemonstrated standing, but upheld theposition of EPA on the merits. The court heldthat post-treaty decisions of parties to theMontreal Protocol on Ozone DepletingSubstances were not “law” that could bindcourts of the United States, as they were notsigned by the President or ratified by theSenate. Resolving Federal Liability to Ensure theCleanup of Hazardous Waste. Through theuse of alternative dispute resolution and withthe assistance of a court-approved mediator,the Division was able to resolve a claimunder CERCLA by Kerr-McGee Corporation(now Tronox LLC) seeking to force theUnited States to pay the vast majority of thecost of cleaning up groundwatercontamination near its manufacturing facilityin Henderson, Nevada. In January 2006, theD.C. District Court in Kerr-McGee ChemicalLLC v. United States entered a consent decreerequiring the United States to pay the agreedupon share of cleanup allocated to the UnitedStates, which was approximately one-third ofthe amount that Kerr-McGee originallysought. Similarly, in Crane Co. v. UnitedStates, a complex action under CERCLAseeking $30 million in alleged past costs andundetermined future costs related to thecleanup of TCE and perchlorate at a formermilitary ordnance and pyrotechnicsmanufacturing plant in Goodyear, Arizona,the United States was able to negotiate afavorable consent decree providing for apayment by the United States of

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approximately 15% of plaintiffs’ claimedpast costs and 21% of future costs. TheArizona District Court entered the consentdecree in August 2006, fully resolving thematter. Finally, in Rhode Island v. UnitedStates, the State sued under CERCLA torecover natural resource damages andresponse costs at the Allen Harbor Landfilland associated wetlands in NorthKingstown, Rhode Island. With theassistance of court-sponsored mediation,the United States reached a $1.2 millionsettlement of all claims for past responsecosts and damages to natural resources inconnection with the Allen Harbor Landfill. The Rhode Island District Court enteredthe consent decree in August 2006.

Defending EPA’s Cleanup Actions. InBenzman v. Whitman, residents of LowerManhattan and Brooklyn filed a class-action suit alleging constitutional tort,mandamus, APA, and CERCLA claimsagainst actions taken by EPA to clean upinside buildings following the collapse ofthe World Trade Center. In February2006, the District Court for the SouthernDistrict of New York held that the StaffordAct precluded judicial review of claimsthat EPA failed to comply with variousprovisions of the National ContingencyPlan because those provisions werediscretionary rather than mandatory. However, the court found that the APAclaim for violation of plaintiffs’substantive due process rights couldproceed. The court allowed constitutionaltort claims filed against formerAdministrator Whitman to proceed. Whitman appealed, and EPA sought andobtained certification for interlocutoryappeal on the one claim against EPA thatthe court did not dismiss.

Defending EPA’s Toxic Release Inventoryand Community Right-to-Know Program. In Ad Hoc Metals Coalition v. Whitman andNational Federation of Independent Businessv. Johnson, the D.C. District Court in January2006, upheld an EPA rule lowering thereporting threshold for lead under the ToxicRelease Inventory program, under whichindustrial facilities must file reports on allreleases of listed toxic chemicals. The courtalso held that the statute authorizes EPA notonly to raise the reporting thresholdsestablished in the Emergency Planning andCommunity Right to Know Act, but also tolower them, finding that such authority wasnot an unconstitutional delegation oflegislative power. Finally, the court held thatEPA reasonably applied a scientificmethodology that uses persistence,bioaccumulation and toxicity to assess thehazard presented by lead.

Defending the Clean Water Act’sNationwide Permits. In NationalAssociation of Home Builders v. U.S. ArmyCorps of Engineers, the D.C. District Court inSeptember 2006, held in the government’sfavor on a “a myriad of challenges” to thenew Nationwide Permits issued in 2002 toreplace a permit that had previouslyauthorized filling that affected up to 10 acresof wetlands. The court determined that theCorps acted reasonably in issuing nationwidepermits with more restrictive conditions thanthose it had issued in the past, finding that theCorps adequately explained its reasons formaking each of the challenged decisions.

Defending EPA's Interpretation of theClean Water Act. In Dominion EnergyBrayton Point, LLC v. Johnson, the Divisionsuccessfully defended the EPA's regulatoryinterpretation of the Clean Water Act term"opportunity for public hearing" in a

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challenge by a power company. The FirstCircuit rejected the argument that its priordecision in Seacoast Anti-Pollution Leaguev. Costle, which interpreted the disputedlanguage, created a "non-discretionaryduty" under the CWA. The First Circuitheld that in light of the evolution ofSupreme Court case law on statutoryinterpretation, deference was owed toEPA's reasonable interpretation of theambiguous term.

Defending the Army Corps ofEngineers’ Emergency Authority. In Louisiana Environmental Action Networkv. U.S. Army Corps of Engineers, theDistrict Court for the Eastern District ofLouisiana, in April 2006, refused to enjoinconstruction of a New Orleans landfill forthe disposal of hurricane debris. The courtfound that plaintiffs failed to establish alikelihood of success on the merits orirreparable harm, and that the Corps’emergency authorization contained therequisite finding of an emergencynecessary to by-pass notice and commentprocedures and to defer NEPA analysis. The court noted: “One need only lookaround to know the tragic truth of thesestatements and findings.”

Defending the U.S. Army Corps ofEngineers’ Clean Water Act Permits. Division attorneys defeated threechallenges to the Mills Corporation’spermit in connection with the proposedXanadu shopping, entertainment, sports,lodging and office complex in theMeadowlands, in East Rutherford, NewJersey. In Hartz Mountain Industries, Inc.v. U.S. Army Corps of Engineers, andBorough of Carlstadt v. U.S. Army Corpsof Engineers, the New Jersey DistrictCourt dismissed in October 2005 and

February 2006, respectively, challenges to thepermit brought by a disappointed competingbidder and a neighboring municipality ongrounds that the plaintiffs lacked standing tosue. Then, in Sierra Club v. U.S. Army Corpsof Engineers, the New Jersey District Courtreviewed the voluminous record compiled bythe Corps, and on September 28, 2006, heldthat the Corps had properly and adequatelyanalyzed the project under NEPA. The courtalso held that, consistent with Clean WaterAct requirements, the Corps reasonablyadopted a definition of the project profferedby the state development agency and gavesufficient consideration to alternativeconfigurations that could have avoided the fillbefore concluding that there was nopracticable alternative that would meet theproject purpose. Defending Federal Water ManagementPrograms. The continued drought in regionsof the country and the pressure on waterresources generally results in constantlitigation, as more fish species are listed underthe Endangered Species Act due, in part, tothese events. This year the Division prevailedagainst several challenges to federalmanagement of water resources. In Consejode Desarrollo Economico de Mexicali v.United States, a major concrete lining projectfor the All-American Canal, which deliversColorado River water to the ImperialIrrigation District (IID) along the border withMexico, and in Alabama v. United StatesArmy Corps of Engineers, where the adverseimpacts on protected species of the Corps'operation of dams and reservoirs in theApalachicola- Chattahoochee-Flint Basinwere worsened by drought, the Divisionsuccessfully defended against emergencymotions for injunctive relief. The court foundthat the Corps could not be held liable for

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drought and allowed the Corps to continuestatus quo operations.

Defending Fish and Wildlife Service'sEndangered Species Act listingprogram. Several cases resolved by theDivision this year concerned interpretationof ESA provisions that allow for the listingas threatened or endangered species of"distinct population segments" of species,and provisions that require the Fish andWildlife Service to address a species statusin "a significant portion of the range." Division attorneys asserted carefullyarticulated legal theories explaining theagency's interpretations and achievednotable success in Center for BiologicalDiversity v. Fish and Wildlife Service,which affirmed the coastal cutthroat trout"no-list" decision, and Center forBiological Diversity v. Norton, whichaffirmed the Rio Grande cutthroat trout"no-list" decision.

Ensuring Limited Federal Jurisdiction isEnforced. The Administrative ProcedureAct and other special review provisionscircumscribe federal jurisdiction, and inseveral cases the Division prevailed onthese or similar defenses. InEnvironmental Protection InformationCenter v. Fish and Wildlife Service, thecourt held that there was no judicial reviewof prosecutorial discretion where plaintiffsclaimed the Fish and Wildlife Servicefailed to revoke an ESA Section 10 permitwhen the permittee was allegedly inviolation of the permit’s terms of thepermit. In American Bird Conservancy v.Federal Communications Commission thecourt dismissed an ESA challenge topermits for communications towers whereexclusive jurisdiction was in the court ofappeals. Similarly, in Geertson Seed

Farms v. Johanns, the court dismissed ESAclaims against EPA regarding tolerance levelsof Roundup where plaintiffs failed to exhaustadministrative remedies and exclusivejurisdiction rested with the court of appeals. Finally, in Salmon Trollers Marketing Ass'n vGutierrez, the court denied a preliminaryinjunction as unavailable under the limitedjudicial review provisions of the MagnusonStevens Fisheries Conservation ManagementAct.

Defending Federal Criminal Jurisdiction. The Division routinely assists otherDepartment components in securing federalenclave or legislative jurisdiction. This year,the Division assisted another Departmentcomponent in demonstrating the existence offederal legislative jurisdiction at a nationalforest site in Michigan. As a result, the Courtupheld a death penalty imposed as a result ofa murder committed at that site.

Defending the Establishment of a NuclearWaste Depository. The Division advancedthe important policy goal of developing acentral nuclear waste repository in WesternShoshone National Council v. United States. The Western Shoshone Tribes brought thiscase pursuant to the Treaty of Ruby Valleyand attempted to enjoin the federalgovernment from taking any further steps tolicense or develop Yucca Mountain as anuclear waste repository and seeking adeclaratory judgment preventing any use ofthe land not specified in the treaty. The Courtgranted the government’s motion to dismisson sovereign immunity grounds.

Improved Definition of Land Use PlanningResponsibilities and other Principles. Inthe consolidated cases State of New Mexico v.BLM and New Mexico Wilderness Alliance v.Rundell (D. N.M.), plaintiffs challenged the

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Bureau of Land Management’s amendmentof the Resource Management Plan forSouthern New Mexico to govern issuanceof oil and gas leases. Plaintiffs alleged thatthe BLM and Fish and Wildlife Serviceviolated several environmental statutes inadopting the Plan, which they claimed didnot adequately protect the Otero Mesagrasslands. The court held in thegovernment’s favor on all major claims. Most significantly, it found that BLMcomplied with the Federal Land Policy andManagement Act by considering aproposed alternative of New Mexico'sGovernor. BLM was not required to adoptor provide for public comment on theGovernor's precise alternative. The courtfurther held that BLM’s "not likely toadversely affect" determination for theendangered Aplomado Falcon and the Fishand Wildlife Service’s concurrencecomplied with the ESA.

Defense of Corps Permit FacilitatingMass Transit Construction. In manyurban areas, mass transit projects andefforts to relieve the burden of auto trafficare controversial and end up in litigation. In Advocates For TransportationAlternatives Inc, v. Army Corps ofEngineers (D. Mass.), plaintiffs claimedthat the Army Corps of Engineers violatedNEPA and the Clean Water Act when itissued a CWA permit to the MassachusettsBay Transportation Authority to fill up to7.60 acres of wetlands for construction of a17.7-mile commuter rail line extension toserve the southeast suburbs of Boston. Plaintiffs alleged, among other things, thatthe Corps failed to adequately reviewimportant environmental impacts. Thecourt found that the Corps’ environmentalanalysis properly considered beneficial andadverse effects, mitigation measures,

public health and safety risks from trainaccidents and diesel emissions, and effects onrecreation areas, wetlands, historic resources,and State-designated Areas of CriticalEnvironmental Concern, and thus allowed thisimportant project to proceed.

Protecting Taxpayers AgainstUnwarranted Claims. The Division has aresponsibility to protect the public fisc againstunwarranted claims and to provide justcompensation when the government takesprivate property for public purposes. Thisyear, the Division prevailed against a numberof claimants bringing suits as a result of awide variety of federal program decisions. For example, in Cane Tennessee, Inc. v.United States (Court of Federal Claims), theplaintiff alleged that the Secretary of theInterior’s decision to designate an areaencompassing his property as unsuitable forsurface coal mining operations under theSurface Mining Control and Reclamation Actresulted in an unconstitutional taking. InOctober 2005, following trial, the court heldthat the plaintiff failed to establish that thegovernment’s regulatory action caused a losssufficient to constitute a taking.

Major federal construction projectsfrequently result in takings claims. In Ingramv. United States (Court of Federal Claims), agroup of property owners alleged that theconstruction and operation of the Red RiverNavigation Project in Louisiana resulted inthe taking of flowage easements across theirproperty in violation of the Fifth Amendment. In September 2006, following trial, the courtruled in favor of the United States in 15 cases,holding that the Project did not cause surfaceflooding on any of the plaintiffs’ properties,nor did it cause groundwater levels to rise onthe properties.

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The Division also had anoutstanding year defending importantfederal regulatory programs against takingsclaims. In Brace v. United States (Court ofFederal Claims), the plaintiff alleged that aportion of his farm in Pennsylvania hadbeen taken as result of a Clean Water Actenforcement action that required him torestore previously drained wetlands. InAugust 2006, following trial, the courtdismissed all claims, finding that thegovernment’s actions did not take thefarmer’s property in violation of the FifthAmendment. In DuMarce v. Scarlett(Court of Appeals for the Federal Circuit),the heirs of several Indian decedents,alleged a taking of property in violation ofthe Fifth Amendment as a result of thegovernment's application of theSisseton-Wahpeton Sioux Act of 1984. The Act provides that small fractionalinterests in land escheat to the tribe insteadof passing to the heirs. In May 2006, theFederal Circuit reversed the trial court’sholding and found that the government,acting as trustee, timely informed theplaintiffs of all facts pertaining to theirpotential causes of action and, as a result,their claims were time-barred under thestatute of limitations.

General Motors v. U.S. Army Corpsof Engineers involved a state law claimagainst the Corps for recovery of responsecosts in connection with the cleanup of theMiddleground Landfill site onMiddleground Island, in the SaginawRiver. In November 2005, the DistrictCourt for the Eastern District of Michigandismissed the complaint against the Corpswith prejudice, finding that neither theResource Conservation and Recovery Actnor CERCLA waived the federalgovernment’s sovereign immunity from

state law claims for recovery of responsecosts at this privately owned, third party site. Similarly, in Rhode Island Resource RecoveryCorp. v. EPA, a suit challenging remedialaction at the Central Landfill Superfund sitein Johnston, Rhode Island, the court held thatthere is no waiver of sovereign immunity forsuing EPA.

There has also been significantlitigation, in multiple federal district courtsand courts of appeals, relating to theinterpretation and application of the SupremeCourt's decision in Cooper v. Aviall (holdingthat a § 113 contribution action may bebrought only if there is a pending orcompleted §§106 or 107 civil action or asettlement). A particular focus has been onthe issue of whether a liable party who hasnot satisfied the requirements of section113(f) of CERCLA for bringing acontribution action may instead bring anaction under section 107 of CERCLA. TheDivision has taken the position that such suitsare not permitted, and prevailed on this issuein the Third Circuit in E.I. Dupont DeNemours v. United States. The Eighth Circuitruled adversely in Atlantic Research Corp. v.United States; the United States has soughtcertiorari from that decision.

Enforcing Environmental Laws ThroughInternational Capacity Building. TheDivision has developed considerable expertisein providing civil and criminal environmentalenforcement and related training topractitioners, country officials, and judges,and it continues to get requests from bothagencies and foreign countries to providesuch training. Among other activities,Division attorneys assisted senior officialsfrom ASEAN nations to create a SoutheastAsia wildlife law enforcement network at alate 2005 Workshop entitled “Stopping the

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Illegal Wildlife Trade in Southeast Asia”and have conducted several follow-uptraining workshops throughout the area in2006. Division attorneys also lectured atthe Lobster Workshop sponsored by theGulf and Caribbean Fisheries Institute(GCFI) in Colombia in late 2005 to discussLacey Act prosecutions based on foreignlaw violations. As part of their work withthe Enforcement Working Group of theCommission on EnvironmentalCooperation (CEC), Division attorneysdeveloped and presented, withrepresentatives from Canada and Mexico, ajudicial training program for Mexicanjudges in Mexico City and an innovativeenforcement techniques conference inWashington, D.C.. The Division alsohelped organize numerous meetings inD.C. to share information and expertisewith visiting foreign enforcement and otherpersonnel from countries such as China,Belgium, and the U.K. Finally, as amember of the U.S. Coral Reef Task Force,the Division organized and led extremelywell-received interagency enforcementtraining workshops in three Task Forcemember jurisdictions. Together with anumber of other federal agencies theDivision is currently working with theCommonwealth of Puerto Rico on a similarworkshop.

PROTECTING INDIAN RESOURCESAND RESOLVING INDIAN ISSUES

Defending Tribal and Federal Interestsin Water Adjudications. Wateradjudications are complex cases, ofteninvolving the rights of thousands of parties.During the past year, the Division settledor achieved entry of a final decree based ona settlement in four major water rightsadjudications in which the United States

asserted water rights claims for the benefit oftribes. First, in Arizona v. California, theSupreme Court issued a consolidated finaldecree that ended 54 years of litigation in theoldest original action brought before theCourt. The decree approved the settlementsbetween the United States, the QuechanIndian Tribe, and the State of Arizona, andbetween the Quechan Tribe, the MetropolitanWater District of Southern California, and theCoachella Valley Water District. The decreealso consolidated five separate decreespreviously issued by the Court. Second, theUnited States sought the adjudication court’sfinal approval of the Gila River IndianCommunity Water Rights SettlementAgreement in In re Gila River System andSource. The settlement, if approved, will bethe largest water rights agreement in Arizonahistory, and will provide the Gila River IndianCommunity with 653,000 acre-feet of waterannually. Third, in United States v.Washington Department of Ecology (Lummi),the Division worked with the InteriorDepartment, the State of Washington, privatewater users, and the Lummi Indian Nation tocraft a historic settlement of an importantwater rights lawsuit involving groundwaterunderlying the Lummi Reservation. Finally,the Division negotiated a consent decreeresolving the United States’ claims on behalfof Duck Valley Reservation in In re SRBA.

Protecting Tribal Hunting, Fishing, andGathering Rights. The Division litigates todefend treaty-protected tribal hunting, fishing,and gathering rights. In United States v.Michigan, the United States, several tribes,the State of Michigan, and interestedMichigan hunting and conservation groupsnegotiated the terms of an agreement inprinciple that, when formalized in a consentdecree, will recognize the existence andextent of the inland hunting and fishing rights

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of five tribes in Michigan. In United Statesv. Washington, the Division worked with17 tribes, the State of Washington, andcommercial entities to reach a settlement ofthe tribes’ treaty right to take shellfish.

Protecting Tribal Lands. The Divisionalso defends and brings suits relating toover 50 million acres of land that theUnited States holds in trust for tribes. InFidelity Exploration & Production Co. v.United States, the Division successfullydefended a challenge to whether the UnitedStates had a colorable claim that a portionof the Tongue River bed lies within theNorthern Cheyenne Indian Reservation.

Protecting Tribal GovernmentalAuthority. Following a decision by theSupreme Court that Indian tribes lackedjurisdiction to bring criminal prosecutionsagainst members of other Tribes, Congressenacted legislation reinstating thatauthority. The Division has successfullyopposed two constitutional challenges tothat legislation, and secured rulings fromthe Ninth Circuit that the legislation doesnot violate due process or equal protection. The two cases are Means v. Navajo Nationand Morris v. Tanner; certiorari has nowbeen denied in both cases.

Upholding Agencies’ Authority toImplement Indian Policies. In addition toactively defending the Secretary of theInterior’s land trust acquisition authorityagainst constitutional and administrativelaw challenges, the Division successfullyresolved a challenge to the Secretary’sability to take land into trust for use by theNottawaseppi Huron Band of PotawatomiIndians in CETAC v. Norton.

Defending Implementation of IndianGaming Laws. The explosion in Indiangaming has brought an increasing number ofchallenges to its regulatory structure. TheDivision was successful in defending theconstitutionality of provisions of the IndianGaming Regulatory Act in Santee Sioux Tribeof Nebraska v. Kempthorne, in which the courtrejected constitutional and statutorychallenges to a regulation that providesprocedures in lieu of a Tribal-State compactallowing gaming. The court also upheld theInterior Secretary’s determination that casinogames were not permitted under Nebraskalaw and could not be the subject ofprocedures in lieu of a compact. InWyandotte Nation v. Sebelius, the Divisionpreserved the exclusive jurisdiction of theUnited States to enforce Indian gaming lawson Indian lands in Kansas. In Sebelius v.Norton, the court affirmed that the Secretaryacted properly in taking these same Indianlands into trust for the Wyandotte Nation as amandatory acquisition directed by Congressand not subject to NEPA or the NationalHistoric Preservation Act.

SUPPORTING THE DIVISION’SLITIGATORS

New ENRD Intranet. In April, theExecutive Office rolled out its new andimproved ENRDNET, an intranet sitefeaturing daily announcements as well as one-stop access to more than 35 Division-wideservices and programs with related guidanceand online forms. The intranet upgrade hasbeen well received by Division staff, andusage statistics (over 1 million page-views inthe first 6 months) show that it is improvingcommunication and knowledge managementfor the staff.

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Computer System Upgrade. ENRDcontinued its commitment to providingtop-quality technology for Divisionlitigators with an upgrade to the JCONdesktop office automation system in 2006. Over the first three months of the year, thedesktop was upgraded with the latestsoftware available in both the Microsoftand Corel office automation suites, thelatest version of the Internet software, andnew versions of the most-used litigationtools. This new desktop image was rolledout to all employees with minimaldisruption. The Division also upgraded itsvideo-teleconferencing hardware withportable systems that allow video-conferencing where a network system dropis available.

Automated Litigation Support. TheOffice of Litigation Support providedoutstanding support to some of ENRD’smost complex cases, making excellent useof technology, contract staff, and in-houseexpertise. We provided on-site trialsupport for major civil and criminal casesacross the country, in locations as diverseas San Diego, Portland, Salt Lake City,Miami, Ohio, and Virginia. Case supportranged from assisting with documentmanagement to establishing technologicalinfrastructure that can link the courtroomand hotel prep rooms with DOJ offices inDC or elsewhere. The litigation supportteam met complex demands for physicaland electronic security of documents.

The Office of Litigation Supportcontinued its exemplary “back office”support of trial teams this year with thecreation of a mock electronic courtroomwhich trial teams can use to practicelitigating in the new, entirely electronic,courtroom environment. The Division also

saw growth in the use of technology throughthe expanded use of its secure extranetconnection over which trial teams sharedocuments with experts, outside agencycounsel and other interested parties. ENRD’sdocument scanning lab and other innovativeapproaches to automated litigation supporthave served as models of best practices thathave been emulated by other DOJcomponents and outside agencies.

Security and Emergency Planning. In2006, ENRD pursued an aggressive agendafor security and emergency planning. TheDivision completed writing a comprehensiveContinuity of Operations Plan (COOP Plan)several months ahead of the requiredDepartmental schedule and began requiredemployee training on the Plan (which willcontinue into 2007). As part of the Plan, theDivision’s information technology staffdeveloped a sophisticated mirror networksystem that will serve as an instantly availablebackup, current to within 24 hours, should theprimary computer network system becomeunavailable due to an area-wide emergencyevent. About two-thirds of ENRD’semployees have the capability to access theDivision’s computer network from a remotesite if the office buildings are not fit foroccupancy. This network redundancy ensuresa more flexible and efficient work capabilityfor ENRD employees. The AssistantAttorney General also approved extension ofa telework policy for attorneys which can beexpanded, if necessary, in support of theCOOP and other emergency planninginitiatives.

The Division is working with buildingsecurity committees and other Federalagencies to ensure that physical security inour buildings continues to improve to thehighest levels needed for the health and safety

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of all our employees. We have begunimplementing the changes required for theissuance of government-wide identificationcards mandated under Homeland SecurityPresidential Directive 12 (HSPD-12).

President’s Management Agenda. ENRD has been an active participant in theDOJ initiatives to improve the managementof the Federal Government under thePresident’s Management Agenda. TheDivision contributes to the Departmentalrating for three initiatives: Human Capital,Budget and Performance Integration, ande-Government. We were awarded a“green” score for each quarter of 2006 inwhich we received a “report card” rating. Beyond the regular quarterly contributions,ENRD also has worked with the DOJHuman Resources office on the Skills Gapsurvey analysis, Human Capital Survey,and the updating of the Department’sHuman Capital Strategic Plan.

Support Programs. ENRD’s HumanResources staff implemented an HonorsParalegal Program, as part of the FederalCareer Intern Program, that will provide astrong recruiting avenue for entry-levelparalegal support. Several litigatingsections and individual trial teams electedto participate in a pilot program for mailscanning, which allowed them to receiveall of their mail in electronic format after ithad already been opened and catalogued tothe proper case. This pilot program wassuccessful and will become the basis for afully electronic mail and file managementprogram to be implemented in 2007.

In compliance with newrequirements from the Office ofManagement and Budget, theComptroller’s Office assisted the Division

with implementing stronger internal controlsover our financial programs. The Office alsoprovided updated training to all attorneys onthe use and management of their purchasecards for litigation expenses.

ENRD’s Denver Field Office staff was movedinto upgraded space in the Rogers FederalBuilding this spring. The space includesergonomic office design, and better securityfor employees.