Water Chemical Exec Pleads Guilty To Conspiracy

A former executive at a water treatment chemicals company pleaded guilty this month to a role in a conspiracy to eliminate competition in the water treatment market.

The scheme by former executive Brian Steppig allegedly victimized municipal water utilities in the southeastern U.S.

Steppig admitted to rigging bids, allocating customers, and fixing the price for liquid aluminum sulfate sold to cities and pulp and paper companies, according to an announcement from the Justice Department, which noted that the FBI played a role in the investigation.

“Steppig formerly was GEO Specialty Chemical's market and sales director and worked out of the company's Little Rock, Arkansas, office,” Journal & Courier reported.

Steppig admitted “to agreeing with competitors from approximately 2005 until February 2011 not to compete for contracts for liquid aluminum sulfate, which is a coagulant used by municipalities to treat drinking water and wastewater and by pulp and paper companies in their manufacturing processes,” according to the Justice Department.

The federal investigation into collusion in the liquid aluminum sulfate industry has turned up guilty pleas from two individuals and one company, according to the Justice Department.

“The Ohio-based company [GEO Specialty Chemical] will pay a $5 million fine for conspiring to fix prices, rig bids and allocate customers involving contracts for liquid aluminum sulfate, a chemical used by municipalities to treat drinking and waste water and by paper companies in their manufacturing process,” Reuters reported in June.

Assistant Attorney General Makan Delrahim said in a statement: "This offense was particularly egregious, counting among its victims cities and towns throughout the southeastern United States that relied on the conspirators' products to provide clean water to their residents."

Journal & Courier investigated the water utility perspective on this issue.

“Dave Henderson, West Lafayette Utilities director who runs the wastewater treatment plant, said liquid aluminum sulfate is used to remove phosphorus from treated water. West Lafayette does not use this chemical because it produces more sludge and other chemicals can remove the phosphorus without adding to the physical byproduct,” the report said, citing Henderson.

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