Chairman Sarbanes, Senator Reed, and Members of the Subcommittee, I am pleased to be here today, along with my colleagues on this panel. I would particularly like to thank Senator Reed for his invitation to discuss what the Environment and Natural Resources Division of the Department of Justice is doing to make housing in America lead-safe. This hearing provides a wonderful opportunity to educate the public about the federal government's efforts to protect America's most important resource, its children, from the evil of lead-based paint poisoning.
In my testimony today, I will focus primarily on the Department of Justice's enforcement efforts in connection with the Residential Lead-Based Paint Hazard Reduction Act. I will give some background on the genesis of the Act and the enforcement initiative developed by our colleagues and clients at the Department of Housing and Urban Development (HUD) and the United States Environmental Protection Agency (EPA), talk about our role in that initiative, and briefly discuss a few success stories from the last year in both the civil and the criminal enforcement context. I will also touch upon the work of my Division in reaching out to the United States Attorneys Offices and state and local enforcement agencies to help them to be more effective in their lead paint enforcement efforts. I would also be happy to answer any questions that the Subcommittee may have about our efforts in this important area.
I. THE FEDERAL RESIDENTIAL LEAD-BASED PAINT HAZARD REDUCTION ACT OF 1992
Lead poisoning is a significant health risk for young children -- it can impair a child's central nervous system, kidneys, and bone marrow and, at high levels, can cause coma, convulsions, and death. Of course, ingesting lead is not good for anyone, but children under six years of age are at the greatest risk of lead poisoning. This is true for two reasons. First, humans are very vulnerable to the effects of lead during these formative years, when lead in the bloodstream interferes with and retards normal development. Second, as any parent knows, small children will put almost anything in their mouths, including paint chips, dust and soil containing lead, regardless of how many times you tell them not to do it. In fact, lead-contaminated dust generated from deteriorated lead-based paint in housing is the single largest source of lead-poisoning. Lead poisoning is especially acute among low-income and minority children living in older housing.
This public health problem was the genesis of the federal Residential Lead-Based Paint Hazard Reduction Act, 42 U.S.C. § 4852d, which requires the sellers, owners, and managers of residential buildings built before 1978 (the year that lead was banned from residential paint) to warn prospective buyers and tenants about the likely (and known, if any) presence of lead-based paint and lead in dust or soil on the property. It also requires landlords to give tenants an EPA pamphlet about how to minimize the dangers to children, and directs them to document their compliance with the law by keeping tenants' signatures on file, using a standard disclosure form. Regulations implementing the statute are located at 24 C.F.R. part 35 and 40 C.F.R. § 745.100 et seq.
With regard to civil enforcement actions, the Act authorizes EPA and HUD to assess an administrative civil penalty in the maximum amount of $10,000 for each violation. (For violations occurring after January 31, 1997, this amount has been adjusted to $11,000 per violation under the Civil Monetary Penalty Inflation Adjustment Rule.) Although the Act provides no authority for judicial civil penalties, it does authorize injunctive relief for violations of the Act.
With regard to criminal enforcement, the Act states that failure to comply with the notification requirements is a prohibited act under the Toxic Substance Control Act (TSCA) section 309 (15 U.S.C. § 2689). The criminal enforcement provision of TSCA, in turn, provides for a criminal fine up to $25,000 for each day of violation and/or a term of imprisonment up to one year. 15 U.S.C. § 2615(b). As modified under the Alternative Fines Act, the maximum criminal fine for this Class A Misdemeanor is $100,000 for an individual, 18 U.S.C. § 3571(b)(5) and $200,000 for an organization, 18 U.S.C. § 3571(c)(5), per count, or the greater of twice the gross gain or loss. 18 U.S.C. § 3571(d).
II. LEAD-BASED PAINT ENFORCEMENT INITIATIVE
Strong and fair enforcement of the law is necessary to ensure that legal goals become practical realities. It is also important that law-abiding businesses have a level economic playing field on which to compete, and that those who fail to comply with the law know they will be penalized. In the case of the Lead Hazard Reduction Act, the Department of Housing and Urban Development embarked on a civil enforcement initiative to ensure compliance with the Act's requirements after its effective date in 1996. HUD focused its enforcement actions on four major cities - Los Angeles, Chicago, New York, and the District of Columbia - and proceeded by targeting large management companies responsible for buildings which were covered by the Act and had multiple incidents of lead poisoned children. Among other investigative methods, it contacted local health departments and asked them to provide the Department with a list of addresses of properties where children had been poisoned. It then zeroed in on sites where multiple lead-poisoned children appear in a single building or a single owner or management company is associated with multiple poisoned children in several buildings. EPA also has a lead coordinator in each of its ten regions responsible for Lead Hazard Reduction Act enforcement.
This simple but effective strategy helped the agencies quickly identify those companies and individuals who were responsible for some of the biggest lead-paint related problems. The agencies could then focus their investigative resources on cases that would give the biggest bang for the buck, both in terms of the number of housing units at issue and in terms of getting the word out about the need to comply with the law. Based on this footwork, HUD and EPA began filing a series of administrative enforcement actions against violators of the Act.
Before I go on to talk about our role in this initiative, I would like to credit my colleagues and the hard-working people at HUD and EPA that have made this initiative such a success. They have done a remarkable job in developing investigative strategies and putting in the many hours it takes to turn a good plan into great results. One of the things Senator Reed asked me to address was how DOJ can interact more efficiently with other agencies to eliminate lead-based paint poisoning in children, and I am happy to tell you that we are already working very well with them to achieve this important goal. Thanks to their efforts, and also the efforts of the good people in the United States Attorneys Offices, the Federal Bureau of Investigation, and the state and local agencies responsible for this issue, I have some major success stories to tell you on the judicial front.
III. THE DEPARTMENT OF JUSTICE'S ROLE IN THE INITIATIVE
A. Civil Judicial Enforcement
And the judicial front is where we at DOJ come in. One way of thinking of our role in this initiative is that we provide a backstop and a big stick to the agencies. For example, when HUD has confronted a violator, but the violator is choosing to be obstinate and unwilling to do what needs to be done to make amends for the violations, HUD has the option of telling that person that it will refer the case to us and he can then answer to a federal judge instead.
Also, some cases call out for more than just administrative enforcement for a variety of reasons, for example magnitude and seriousness of violations, the type of relief that the agencies want to obtain from the violators, or the need to get the word out to a broader audience about the problem and the need to comply with the law. In these cases, the agencies come to us and ask us to pursue actions in court.
We have pursued several cases judicially, beginning with the first ones that the Division and HUD filed here in the District in 1999. These first actions filed in the U.S. District Court for the District of Columbia included four settlements totaling more than $1 million worth of lead paint abatement in close to 4,000 dwelling units, and $259,000 in fines and other commitments.
Our most recent success came last October, when DOJ, HUD, and EPA announced settlements in cases against three landlords in Chicago for failure to warn their tenants that their homes may contain lead-based paint hazards. The three companies in question controlled nearly 10,000 apartments in Chicago and Cincinnati, and they agreed to test for and cleanup any lead-based paint found in their properties, and have also paid $90,000 in penalties. One of the companies also agreed to pay $100,000 to Chicago's Health Department as part of a child health improvement project, and the other two agreed to give $77,000 to a community-based health center to provide free blood lead testing for children living in Chicago and South Chicago. These settlements will not only get these companies back into compliance with the law, but will provide benefits to the community that would not otherwise have been available.
At the same time, HUD also announced settlements in four administrative cases against landlords in New York City and Los Angeles that own and manage approximately 6,500 units. The landlords in the administrative cases agreed to pay $61,000 in penalties and to test for lead-based paint in their properties and cleanup any lead-based paint that is found.
Taken together, these and the many other judicial and administrative actions that we have brought demonstrate that this enforcement strategy is working - we are getting thousands of units cleaned up and the word is getting out to management companies and landlords across the country that we are serious about making sure they comply with the disclosure requirements. And we have more civil cases in the pipeline across the country, from California to Senator Reed's home state of Rhode Island.
Another group that I want to be sure to credit is the United States Attorneys Offices. To leverage our resources and enhance our effectiveness, the Division has forged partnerships with U.S. Attorneys' Offices around the nation and provided them with materials and training so they can be more effective in bringing their own lead-paint cases. They now carry out much of the enforcement of the lead rules, which encompasses working with HUD and EPA to investigate violations, conducting file inspections to determine compliance with the law, and leading the negotiations with violators. In addition to the training and materials we provide them, the Division's role in cases where the USAO is providing the lead is to assist in drafting the settlement document, developing the scope of injunctive relief, and determining an appropriate penalty. In doing so, we help to maintain a consistent and fair remedial approach to lead disclosure cases nationwide.
We also work with state Attorneys General and other state and local officials across the nation to increase cooperation among local, State, and federal lead-poisoning enforcement agencies. The State and local people are essential players in this enforcement effort -- in fact, our cases often get started when we receive reports of elevated blood levels of lead from a local health department. Working with the States also gives us the advantage of being able to use State and local laws, such as Maryland's, which may be more protective than federal law.
B. Criminal Prosecutions
The U.S. Attorneys Offices and the state and local enforcement agencies deserve credit in the criminal as well as the civil enforcement context. There have been some especially egregious cases which have warranted criminal prosecutions. The U.S. Attorneys Offices in Maryland and New Hampshire, working with the Justice Department's Environmental Crimes Section, have brought the first two criminal cases. Their good work has been aided by special agents with HUD's Office of Inspector General, the EPA - Criminal Investigations Division, and the FBI, and by others at HUD and EPA. In fact, the Division will be presenting them with certificates of commendation later this month.
Consider, for example, the case of David D. Nuyen, a Washington-area landlord, who owned and managed 15 low-income rental properties in the District of Columbia and Maryland.
HUD's Office of General Counsel contacted Nuyen in September 1998 as part of the civil enforcement initiative because his name appeared on a list of landlords with the most housing code violations and a list of landlords with multiple cases of lead poisoned children. When first contacted, Nuyen did not have any of the required lead paint disclosure forms, but two months later, he presented the agency with lead paint forms.
The problem with the forms that he presented to HUD was that they were falsified, forged and backdated. They made it appear that Nuyen had given tenants the required hazard warnings when in fact he hadn't, even in those instances where he had previously received notices of violation from the District of Columbia that an apartment was found to have dangerous levels of lead. Moreover, Nuyen was familiar with the requirements of the law because he had attended classes on the Lead-Based Paint Hazard Reduction Act in 1997 and 1998 as part of his continuing education requirement for being a licensed real estate broker.
Nuyen's criminal conduct did not stop with the submission of false records to HUD. For example, during the course of the criminal investigation, Nuyen lied at a meeting with civil enforcement officials from HUD and the Department of Justice, he lied to federal agents, he made his tenants sign affidavits under the penalties of perjury falsely saying that they had received the lead paint disclosure forms, and he provided false testimony to a federal Grand Jury on two separate occasions.
Nuyen's outrageous behavior made his case an appropriate one for the first criminal prosecution involving the Lead Hazard Reduction Act. His conviction last July in Greenbelt, Maryland, for obstruction of justice, false statements and the Lead Hazard Reduction Act, earned him a two year prison sentence and a $50,000 criminal fine. Under the terms of a plea agreement, Nuyen's sentence also required him to provide all tenants with new notices about lead paint assessments performed by an independent contractor approved by the government.
Another criminal case, United States v. James T. Aneckstein and JTA Real Estate Brokerage and Property Management Inc. (D.NH), culminated in March in New Hampshire. This prosecution began with the tragic death two years ago of Sunday Abek, a two-year-old girl who died of lead poisoning while residing in a rental apartment managed by Aneckstein, the owner of JTA Real Estate Brokerage and Property Management, Inc. ("JTA"). Shortly after the City of Manchester Health Department and New Hampshire Department of Health and Human Services announced that Sunday's fatal lead poisoning was most likely caused by exposure to lead paint in the apartment in Manchester, New Hampshire EPA officials visited JTA's office to determine whether Aneckstein and JTA had complied with the Lead Hazard Reduction Act. Aneckstein presented EPA with forged, backdated and otherwise falsified lead paint disclosure forms that falsely certified that Sunday's mother and other tenants in her building had been given the required lead paint warnings. Aneckstein forged the tenants' signatures by reproducing the tenant's real signatures from their leases and transposing them onto the lead forms in an attempt to conceal his violations of the lead hazard disclosure requirements. Aneckstein signed an affidavit falsely swearing that all of the documents he provided to EPA were true and accurate. When the same information was sought by a federal grand jury, Aneckstein and JTA again submitted false, forged and backdated documents.
In March this year, Aneckstein was sentenced in federal district court in Concord, New Hampshire to 15 months incarceration and a $40,000 criminal fine. Again, prosecutors required Aneckstein and his company, as part of a plea agreement, to perform a lead assessment, properly notify tenants and take other remedial measures.
The conduct of Nuyen and Aneckstein was particularly serious because it involved deliberate attempts to disobey the law. Both engaged in numerous, well-planned, repetitive violations. Both engaged in affirmative acts to obstruct regulators and grand juries in an effort to cover-up their underlying failure to provide the lead hazard warnings required by the Lead Hazard Reduction Act. Both substantially undermined the investigative and prosecutorial process. My message to the James T. Anecksteins and the David D. Nuyens of the world is that landlords and property managers have an obligation to inform tenants of lead paint. Deliberately failing to notify tenants of lead hazards, especially in those instances where actual hazards are known, and lying to agencies entrusted with protecting public health and safety, are serious crimes. The Department of Justice is committed to working with our partners at HUD and EPA to fully investigate and prosecute such violations.
Childhood lead-poisoning is a completely preventable threat to children. I believe that most of the real estate and housing community are law-abiding citizens who want to do the right thing, and the civil and criminal enforcement actions taken to date have helped to educate them so that we can have better compliance with the law and lead-safe housing for our children. We are proud to be working with our partners at HUD, EPA, and state and local enforcement agencies on this effort, and look forward to bringing more successful actions to protect America's kids, especially those disadvantaged ones who are at greatest risk. With your continued support, we believe that we can move a long way toward eliminating lead poisoning.
I look forward to working with the subcommittee on this important issue and am happy to answer any questions that you may have.
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