Troubled water: Public water operator’s violations keep flowing
A multinational company that manages public water systems in Oklahoma has a pattern of water quality violations. And no one outside the company knows how many of Oklahoma’s 1,600-plus water systems they’re managing.
In Heavener the problem was the brown, dirty water that no one would drink, water that stained clothes and was too polluted to use.
In Moore, the problem was arsenic; there was so much arsenic in the water that it violated federal and state health guidelines numerous times.
In El Reno, the problem was wastewater; specifically, whether the city’s wastewater had been properly treated for E. coli bacteria before being discharged into a nearby river.
For three Oklahoma communities, the issues with water and wastewater became so large they frightened residents and evolved into an ongoing nightmare for city officials — a nightmare the cities spent thousands of hours and millions of dollars trying to fix.
At first glance, the water problem in each town seemed unique, but underneath there was a common thread: a private water company called Veolia North America.
Contaminants in drinking water can lead to gastrointestinal illness, reproductive problems and neurological disorders, according to the U.S. Centers for Disease Control. Infants, young children, pregnant women, the elderly, and people with weakened immune systems may be at increased risk of becoming sick after drinking contaminated water.
The Safe Drinking Water Act, which took effect in 1974, requires that systems reduce certain contaminants to set levels in order to protect human health. In 1999, the Environmental Protection Agency transferred authority to enforce that law in Oklahoma to the Department of Environmental Quality.
Neither state nor federal law requires public water systems to report the names of outside companies hired to manage operations. Only one individual, a licensed operator, has to be identified. Jennifer Boyle, DEQ’s general counsel, said there’s no law to hold third-party operators accountable.
No one outside the company knows how many more of Oklahoma’s approximately 1,600 public water systems Veolia operates, and the company declined to speak to Oklahoma Watch for this story.
Veolia North America bills itself as a global leader in resource management.
“With nearly 179,000 employees worldwide, the group designs and provides water, waste and energy management solutions which contribute to the sustainable development of communities and industries,” the company’s website says. “Through its three complementary business activities, Veolia helps to develop access to resources, preserve available resources, and to replenish them.”
Its Paris-based parent company, the environmental giant Veolia Group, is successful, too. In 2020 the company reported revenue for Veolia Group of about $29 billion.
With offices across the United States, Veolia North America touts its services to communities both small and large and pushes the idea it can protect the environment and help communities save money.
But those services come at a high cost.
In El Reno, city officials paid Veolia nearly $1.2 million per year. In Heavener, Veolia billed about $2.4 million per year for water services. And in Moore, records show the city paid Veolia more than $6.7 million per year from 2011 through 2021.
The expenditures were large, but the water remained polluted.
For decades, the town of Heavener in southeastern Oklahoma, population 3,253, struggled to provide residents with clean, usable water. The problem became so bad it was a local joke. Housing prices dropped, according to published reports, and those who did move into the town were quietly warned not to drink the water.
To solve the problem, community leaders turned to Veolia. But records, including a report from the state Department of Environmental Quality, show the facility did not maintain industry and government standards after Veolia took charge.
The water became so bad that residents stopped using it and turned to bottled water. Some public officials questioned Veolia’s management of the water system; Veolia countered that Heavener’s bad water was a result of old pipes.
Customer complaints skyrocketed.
Eventually, the Department of Environmental Quality stepped in. An August 2019 report painted a bleak picture of Veolia’s management and listed seven notices of violation and 27 deficiencies. Inspectors from DEQ issued notices of violation to Veolia for its filtration and chemical treatment and for the way it monitored equipment operations. The inspectors noted the facility’s monitoring equipment was not properly calibrated, which could produce unreliable testing results.
Because accuracy in testing for contaminants is necessary to protect public health, DEQ criticized the way Veolia reported information and questioned how Veolia employees drew water samples. The report raised concerns about whether the samples were designed to give artificially positive information about water quality.
Following the report, on Sept. 23 of that same year, Shellie Chard, the director of DEQ’s Water Quality Division, sent a seven-page letter to the city of Heavener and Veolia North America. That letter, a Notice of Violation, identified several pages worth of problems with Veolia’s Heavener water system management.
Chard’s letter ordered Veolia and Heavener officials to take corrective actions within 14 days. The letter also threatened enforcement actions if the problems weren’t fixed.
On Oct. 22, 2019, DEQ issued Veolia an administrative compliance order that specified 46 violations and levied a fine of $3.03 million, the largest drinking water fine ever assessed by the agency, calculated at the statutory rate of $10,000 per day for the 10 months DEQ says Veolia remained out of compliance.
Former state Rep. Lundy Kiger had been monitoring the problems in Heavener. Kiger, a former vice president of AES Shady Point power plant, became one of Veolia’s harshest critics.
“When I was in office, I was getting all sorts of calls from Heavener,” Kiger said. “I kept thinking, ‘my gosh we did this 25 years ago.’ They had problems with their water plant. They had a guy there who had run the plant for years. Then they hired Veolia to run it.”
Kiger said residents brought to a community meeting examples of water so dirty it looked like dark tea.
“One woman, a nurse, brought in sheets and blankets she had washed with Heavener water,” Kiger said. “They had black streaks on them. The water was so bad people were having to change out water tanks and dishwashers.”
On Nov. 21, 2019, the Heavener City Council voted to terminate the city’s contract with Veolia. Four days later Veolia issued a statement calling on Heavener to pay the company’s $3.03 million fine.
Veolia North America counted by asserting it inherited “numerous operational challenges, especially a damaged computer monitoring system” when it assumed operations of the Heavener water plan.
“Veolia agreed to step in and help the Authority but, as the Authority clearly knows, Veolia’s willingness to assist was conditioned upon the parties’ including a provision in the contract that made it clear that Veolia would not be held liable for compliance or regulatory problems that were likely to arise due to the preexisting condition of the water plant,” wrote Carrie Griffiths, a Veolia North America spokesperson and vice president.
On Dec. 31, 2019, Veolia ended its tenure as the operator of the facility.
The city of Moore stretches along the I-35 corridor between Oklahoma City and Norman. Moore’s closest major body of water is Lake Stanley Draper, an Oklahoma City reservoir several miles to the east.
To supply water for its 60,000 residents, Moore relies on water taken from 34 active wells that tap the Central Oklahoma Aquifer. Moore also purchases water from Oklahoma City.
Though water from the aquifer is plentiful, it has a history of naturally occurring pollutants, including arsenic, chromium, selenium and uranium at levels that exceed the allowed maximum of 10 parts per billion.
In 1993, with sales tax revenue dropping and expenses increasing, Moore signed a contract with Veolia Water North America to operate and maintain the city’s water and wastewater treatment facilities.
Department of Environmental Quality records show that between December 2013 and June 2019, Moore had five Safe Drinking Water Act violations for arsenic. Four were health-based violations for arsenic levels in the water that exceeded the maximum levels allowed and one was a non-health violation for arsenic monitoring problems.
Marc Edwards, a professor of civil and environmental engineering at Virginia Tech University, helped expose the lead-contaminated water in Flint, Michigan and in Washington state. Two years ago, Edwards began examining arsenic contamination in Moore.
He was greeted with hostility by city officials.
On Sept. 29, 2020, Edwards emailed the city’s mayor and members of the city council telling them he had been trying to communicate important concerns about elevated arsenic in Moore’s drinking water.
“Attempts to contact appropriate city officials include phone calls, sending emails to incorrectly listed addresses that do not exist for (Moore city manager) Steve Eddy and (Veolia employee) Robert Pistole, and I have also left phone messages that have gone unanswered,” Edwards wrote.
Edwards asked city officials for a current list of contacts, adding that if the city refused, he “would have no choice but to immediately escalate this public health concern with your regulator, the U.S. EPA and the media.”
Emails obtained by Oklahoma Watch show Moore City Councilman Adam Webb, city employees, and Pistole all criticized Edwards’ attempt to obtain the records.
“Your emails seem to be combative and that your (sic) just looking for your new ‘time of fame’ to feed your ego,” Webb wrote in an email to Edwards. “To our knowledge there is no issue with the water. The EPA has never stated there is an issue with arsenic levels.”
Webb’s claim, however, wasn’t true.
Records show that as far back as 2011, the state Department of Environmental Quality — which enforces local and federal environmental law and policy — issued Safe Drinking Water Act violations for high levels of arsenic in the city’s water. In 2012, 2018 and 2019 the agency hit Moore with additional violations for arsenic levels in its municipal water.
Emails between Edwards and other experts also raised doubts about Veolia’s efforts to reduce arsenic in Moore’s water and questioned whether Moore was simply blending arsenic-laden water with water purchased from Oklahoma City to pass required tests.
Although blending is a common, accepted practice to lower levels of naturally occurring elements such as arsenic, buying water to blend can be expensive. The emails revealed that scientists examining Moore’s practices suspected the city’s water quality strategy had more to do with reporting the right numbers and saving money than protecting public health.
During May and October of 2019, the city was forced to notify customers of high arsenic levels in two separate wells.
Veolia North America continues to operate Moore’s water system.
In 2015, the state Department of Environmental Quality issued a pollutant discharge permit to El Reno, which authorized the city wastewater facility to discharge properly treated municipal and industrial wastewater into the North Canadian River.
Records show the permit set limits on the amounts of pollutants, including E. Coli bacteria, that could be discharged into the river. The permit required samples of the wastewater to be analyzed and the amounts of contaminants reported to DEQ.
In 2017, the city contracted with Veolia North America to manage the wastewater treatment facility. The one-year contract gave Veolia control of the wastewater treatment plant, the city’s water towers, a groundwater storage tank and the city’s water field.
For its work, Veolia would be paid nearly $1.2 million.
Veolia employee Kenneth Fulton was tasked with operating the plant. On Feb. 2, 2020, DEQ officials received a complaint that Fulton had tampered with water samples for more than a year and used chlorine to mask the amount of E. coli. Court records show that Dennis Williams, a DEQ criminal investigator, interviewed workers at the El Reno plant who told him Fulton routinely tampered with water samples before they were mailed for lab testing.
Fulton’s effort, the court documents said, prevented DEQ from verifying the quality of the water discharged into the river.
Fulton was charged in federal court with violating the Clean Water Act. On Feb. 22, Fulton was fined $10,000 and placed on two years’ probation. In addition, Fulton’s state licenses as a waterworks and wastewater works operator were revoked.
“Cutting corners and falsifying tests potentially exposed citizens and the environment to harmful contaminants,” wrote Robert Troester, U.S. Attorney for the Western District of Oklahoma.
Matt White, El Reno’s mayor, said he wanted answers.
“We felt violated by the company that we hired to do the right job,” White told KOCO Channel 5 in Oklahoma City. “This gentleman was falsifying the documents, and we don’t know why.”
Veolia’s contract with El Reno expired in May. The El Reno city council did not renew the contract. White said city officials weren’t happy with Veolia’s integrity or their workmanship.
“I have to go to church and the grocery store and look people in the eye,” White said. “That’s why I voted against it.”
Matt Sandridge, El Reno’s city manager, said the city instead contracted with another company, Infomark, to operate El Reno’s municipal water system.
“It’s public knowledge what happened,” he said. “That was a concern for us. We felt like we needed to shop around.”
On March 3, Veolia North America issued a terse, one-page statement stating that Fulton acted alone.
“Veolia North America finds these lone-wolf actions by a former employee to be abhorrent and will cooperate with and assist government officials as they seek to remedy this situation as quickly as possible,” the statement said. “While we’re still gathering facts and investigating the situation, our understanding is that the former employee, who no longer works for VNA, admitted to Oklahoma officials that he made the decision to falsify samples on his own without knowledge of the company.”
Veolia said it also worked quickly to determine whether the effluent leaving the wastewater facility was in compliance with DEQ standards.
“We have and will continue to cooperate to the fullest extent with the ODEQ,” the company’s statement said. “At the conclusion of its investigation, the company will not hesitate to take appropriate and necessary legal action to correct the wrongdoing.”
Former Attorney General Drew Edmondson said he didn’t know much about Veolia North America until stories of lead-contaminated water in Flint, Michigan were published. There, more than 100,000 residents were exposed to elevated lead levels in their drinking water after the city switched water sources and failed to add corrosion inhibitors to the system.
Veolia North North America was hired as a consultant after the switch and advised returning to the city’s original water source.
Michigan’s attorney general sued Veolia for professional negligence, public nuisance and fraud, charges that were dismissed in 2019. A charge of unjust enrichment was allowed, but the judge pointed out that the residents of Flint, not the attorney general, should be the plaintiffs. More than 350 lawsuits are active against Veolia North America, at least 295 in relation to the problems in Flint.
Since then, Edmondson said, he’s been paying attention. Like Kiger, Edmondson said he was concerned by what he’s learned.
“They — Veolia — have a pattern of bad things happening when they are brought in,” he said.
Kiger urged state officials to levy additional fines against Veolia.
“This is the same type of situation we’ve seen with Veolia not just in Heavener, but in many other places around the United States and now in another Oklahoma town,” Kiger said. “They had some of the most expensive water in the state. Lots of water bills were running $125 and $150 per month.”
Combined water and sewage bills average $68 per month in Oklahoma, according to water supply retailer Dripfina.
Kiger continued to criticize the company, saying he hoped to help spread the word of Veolia’s continued misconduct and how bad this company is for Oklahoma.
“I want everyone in the state involved to know that Veolia has already threatened the city of Heavener in a letter with taking legal actions against the city for full reimbursement of the fines that Veolia earned all on their own,” Kiger wrote in a website posting. “Veolia has filed for a hearing with DEQ where the company will try to get their fine reduced. My position is and always will be that Veolia is a bully and does not deserve to have their fine for violations and findings of misconduct reduced. Veolia should actually receive additional fines by the state to include falsification of data.”
Communities in Massachusetts, Michigan and Pennsylvania have experienced similar problems — or worse — with Veolia’s water management. Michigan Attorney General Bill Schuette charged Veolia with fraud and negligence for failing to discover Flint’s lead contamination problem after the city hired the company in 2015 to consult on water quality.
Federal court records show that Veolia North America faces 309 open federal lawsuits. In Oklahoma, the company is fighting six open lawsuits.
“Veolia has a really bad track record,” said Mary Grant, a researcher and campaign director for the advocacy group Food and Water Watch. “They like to pursue the model of public-private partnership, but many small towns don’t have the expertise to negotiate a good contract with them for their customers.”
Many of Veolia’s contracts, Grant said, were stacked against the cities who work with them. “The cities don’t have bargaining power,” she said. “They don’t do contract oversight.” Grant said Veolia is profitable because they make money by cutting costs.
“They layoff the workforce and use shoddy materials,” she said. “And most states don’t require regulatory approval before a city hires a company such as Veolia to manage their systems.
Although the Department of Environmental Quality regulates more than 1,600 public water systems in Oklahoma, they don’t know which are operated by Veolia.
Records compiled by Food and Water Watch in 2013 show that in addition to Heavener, El Reno and Moore, Veolia has operated systems in Bartlesville, Blackwell, Edmond, Jones, Latimer County, Oklahoma City, Nicoma Park, Tecumseh, Tulsa, and Yukon. It might operate others.
Public water systems self-report to the agency on a monthly basis, said DEQ general counsel Jennifer Boyle. DEQ officials try to get accurate information but, at times, determining who is operating a facility is difficult, she said.
“These contracts expire and new companies come in,” Boyle said. “And there is no law that holds third-party operators accountable.”
In March, Oklahoma Watch contacted Veolia, seeking a telephone interview about the company’s response to problems in Oklahoma. Veolia responded with an email from spokesperson Carrie Griffiths that said, “We have multiple sites and contracts in Oklahoma, and I don’t have all the details, so I’ll need to determine who can provide the information.”
Griffiths asked Oklahoma Watch for copies of its questions. Oklahoma Watch declined, explaining that the organization can’t know what questions it might ask until it knows the responses to the initial questions. Oklahoma Watch did provide Veolia with the general nature of the questions and the cities involved, but the company was unresponsive to repeated requests for an interview.
Griffith eventually issued a four-paragraph statement on April 18 that referenced the company’s contracts with El Reno and Heavener. Veolia’s statement did not address the high levels of arsenic in Moore.
“Veolia Water North America has successfully served numerous communities in Oklahoma for many years, managing water and wastewater systems and improving the quality of these systems for individual municipalities,” the statement said. Griffith’s statement included language from its earlier statement about problems in El Reno, adding that “Veolia will continue to work closely with DEQ as the agency proceeds with its investigation.”
Veolia North America, Griffith’s statement said, puts the highest priority on safety and professional responsibility and will continue to do so.
“In Heavener, VWNA managed operations at the water and wastewater plants owned by the Heavener Utility Authority from 2018 until December 31, 2019. During its operations, VWNA had made significant improvements to the operations of the water plant, including the Supervisory Control and Data Acquisition system and other upgrades.”
Griffith’s statement said Veolia was surprised by the Administrative Compliance Order and fine issued by the Oklahoma Department of Environmental Quality and that the company would “continue to vigorously defend itself and challenge the order and fine through the administrative process.”
Edmondson and Kiger remain concerned.
Kiger said the recent problems in El Reno show just how bad Veolia and its leaders are. He expressed concern about the quality of water in the town of Red Oak and in one Latimer County Rural Water District, both places that have contracts with Veolia North America.
“Veolia had no standard of operation to follow,” Kiger said. “In Heavener, there was a lot they weren’t doing but they were getting their check every month.”
Edmondson said he hoped Oklahoma cities and towns would protect themselves if they did business with the company.
“After a while, you get worried and you start thinking there is a pattern,” he said. “I don’t think I’d hire them to work on my septic tank.”
Editor's Note: A quotation was deleted from this story on July 22, 2022, because it was attributed to the wrong source. The correct source did not agree to participate in the story. The quotation did not contradict or alter any of the facts presented.
Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.