New Haven Independent

The lawyer for the company told Federal District Court Judge Janet Bond Arterton (pictured) it was all just a misunderstanding partly caused by the lawyer’s father’s “senior moment,” but she wasn’t buying.

In her ruling after a nearly five-hour hearing, Arterton found that another ship owned by Ionia Management S.A., was in violation of the terms of her Dec. 14., 2007 probation order when it entered the port of Savannah, Ga. The ship entered the port a few days after the court ordered that no tanker without a so-called “white box” enter any U.S. port.

More about the white box later.

Arterton Thursday appointed a special master to oversee the company’s meeting the terms of the probation. She said she would sentence the company for the violation in about six months, after a report by the master.

The M/T Dromeas, a 60,000-ton tanker owned by Ionia, did not have the required equipment on board. The U.S. Attorney filed papers accusing the company of violating the probation.

The feds asked Arterton to re-sentence the company, extend its probation period from four years to five and levy more fines and other penalties. Last year, Arterton hit the company with $4.9 million in fines after a federal jury found the crew of the M/T Kriton spilled contaminated wastes and sludge directly from the ship into the ocean using a rubber hose.

(Click here, here and here for previous coverage of the case.)

At least 968 tons of oil-contaminated waste were unaccounted for in the Kriton’s oil record books. In addition to falsifying oil record books, Ionia Management submitted false statements in environmental compliance checklists that it was required to submit to the U.S. Coast Guard as part of its probation from the 2004 conviction in the Eastern District of New York, according to the court’s ruling.

George M. Chalos, a Long Island lawyer representing the company, called the charges “at the very worst a technical, unintended violation” and most likely a misunderstanding.”

“We don’t want a fight,” Chalos told Arterton. “We want to move ahead together.”

At issue is the equipment on board ship that confines oily water and monitors that no oily water is discharged into the sea. Arterton had ordered that equipment that prevents this discharge be installed on all ships making port in the U.S., saying in her order that all these ships must have a “white box” on board. Assistant U.S. Attorney Bill Brown told the court “it is clear” that the oil-content monitors the ship did have were not the same as the “white box” mentioned in the court’s order.

No “White Box” On Board

On Thursday, Arterton gave the U.S. Coast Guard the authority to turn back any Ionia-owned ship from U.S. waters unless the proper equipment is on board.

Kristophos Sdoukos, an Ionia official in charge of assuring compliance with the court order, testified Thursday that although the “white box” exists, it does much less than the court wants as far as pollution control is concerned.

The equipment that would meet the court’s requirements, a device called the Envirologger, is more complicated and expensive and requires specific installation onto each ship. It is in the process of being purchased, Sdoukos said.

Arterton’s order that the ships be equipped with a “white box” resulted from a suggestion at the sentencing hearing by Michael Chalos, father of George Chalos, according to the junior Chalos.

“Mike Chalos had a senior moment and misspoke” at the sentencing hearing, resulting in reliance on “the holy white box,” the younger Chalos said. The white box “does not do things the court is talking about,” he said.

Under cross-examination from Brown and questioning by the judge, Sdoukos said no ship has the equipment described by the senior Chalos. He also said his company will make sure no ships reach U.S. waters unless they are in compliance with the court’s order. He did say that the white box could be integrated into an antipollution system but was not really necessary.

In a lengthy direct examination by Chalos, Sdoukos outlined steps he is taking to be sure not only that the ships are in compliance with environmental regulations, but also that crew members could report such violations at first without fear of reprisal and later anonymously.

Another Ionia employee, Matteos Markimis, testified in Greek through an interpreter that he was hired specifically to enhance the antipollution program, but admitted on cross-examination by Brown that he could not produce in court reports about what he found on his examinations.

Sdoukos and Chalos expressed frustration that a special master had not been appointed in the case, a situation remedied by the judge.