Subpoenas reported in oil-spill investigation

By Steve Miletich, Craig Welch and Mike Carter
Seattle Times staff reporters

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A federal grand jury in Seattle has issued subpoenas to ConocoPhillips employees as part of the investigation into last month's mystery oil spill in South Puget Sound, according to three people close to the inquiry.

The grand jury is seeking to gain testimony about the operations of a ConocoPhillips oil tanker, the Polar Texas, that has become a focus of the investigation. The Polar Texas is operated by Polar Tankers, a Long Beach, Calif.-based subsidiary of Conoco.

The grand jury's action is the first indication that the oil spill could become a criminal investigation, although the subpoenas also could be used to help the Coast Guard in its ongoing civil investigation.

Investigators have been seeking to identify the vessel responsible for the 1,000-gallon spill in Dalco Passage, which left an oily slick as far south as the Tacoma Narrows and as far north as Eagle Harbor on Bainbridge Island. The spill, reported Oct. 14, fouled 21 miles of beaches and cost nearly $2 million to clean up.

The subpoenas were disclosed to The Seattle Times by a Conoco employee, a person close to the company and a federal law-enforcement official, all of whom spoke on the condition they not be identified. They did not provide the names of people who received the subpoenas, but the Conoco employee said crew members on the Polar Texas were ordered to appear before the grand jury.

The subpoenas ordered the employees to appear on a specified date, but federal attorneys then postponed that date to an unspecified time, two of the sources said.

A Conoco spokesman, when asked about the subpoenas, said he would call back but did not do so yesterday. The Houston-based company has said it doesn't believe the Polar Texas was responsible for the spill.

Conoco, Alaska's largest oil producer, has said it is cooperating in the investigation. But the company has begun hiring attorneys to represent employees, two sources said, and the subpoenas indicate investigators found it necessary to compel testimony.

Coast Guard investigators began focusing on the Polar Texas two weeks ago, after oil samples taken from Puget Sound appeared to chemically match samples taken from the vessel shortly after the spill, two federal officials said at the time, speaking on condition of anonymity.

Investigators boarded the Polar Texas Nov. 5 at Conoco's Ferndale refinery north of Bellingham to question crew members. This week, the Coast Guard sent divers to inspect the hull of the vessel while it was docked in Port Angeles, the Conoco employee said. The Coast Guard declined comment on the diving operation, but the Conoco employee said he believed the divers did not discover anything unusual.
 
The Polar Texas carries crude oil between Alaska and Washington ports. It left Tacoma in the late afternoon of Oct. 13; the spill was reported about 1 a.m. Oct. 14 by a tug operator. Investigators took oil samples from the vessel Oct. 17 in Valdez, Alaska.

Conoco is being represented by Philip Lempriere, an attorney with the Seattle office of Keesal, Young & Logan, two sources said. Lempriere declined comment.

The company also has hired three prominent criminal defense attorneys in Seattle: Irwin Schwartz to represent the company; and Laurence Finegold and Robert Mahler to represent employees, the sources said.

Keesal, Young & Logan is the law firm to whom a Kirkland company, Polaris Applied Sciences, referred questions in late October.

Polaris has said it sent two scientists to a spill-affected beach to obtain oil samples, and asked the state Department of Ecology for a portion of its samples for independent testing. Polaris said it had been hired by a maritime insurance conglomerate, but didn't identify it.

At the time of the Puget Sound spill, Conoco was already the subject of criminal and civil investigations in Alaska over possible oil spills in that state. The company has said it is cooperating in those investigations.

In a filing with the Securities and Exchange Commission last week, Conoco disclosed it had received a grand jury subpoena in Anchorage on Sept. 1 regarding potential environmental violations aboard Conoco's Polar Alaska. The subpoena asked for records related to wastewater discharges from the Polar Alaska "potentially having concentrations of oil exceeding an applicable regulatory limit of 15 parts per million."

In the Puget Sound spill, state and federal officials have said the responsible party could face civil or criminal penalties related to the discharge of oil and to regulations for reporting spills.

Steve Miletich: 206-464-3302 or smiletich@seattletimes.com