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Defendant testifies in environmental crimes trial over platinum mine

  • Author: Lisa Demer
  • Updated: May 31, 2016
  • Published October 2, 2015

A mine operator on trial over pollution at a Southwestern Alaska platinum mine told a federal jury Friday in Anchorage he knew of muddy wastewater that turned the Salmon River dirty brown. But though he was the on-site boss and designed the mine operation, James Slade testified he never alerted regulators of the problems because, he said, that wasn't within his authority.

Instead, even when the turbidity of the discharges was hundreds of times greater than allowed under Platinum Creek Mine's general permit in 2011, Slade emailed company executives the mine would "continue to produce 24/7 until the wheels fall off." That acknowledgement by Slade provided a punch at the end of cross examination by assistant U.S. Attorney Kevin Feldis.

Slade, a mining consultant from Calgary, Alberta who became chief operating officer for XS Platinum Inc., is accused of six felony charges including conspiracy, various violations of the federal Clean Water Act, and submission of a false report. His testimony in U.S. District Court took up most of Friday, the 10th day of a trial during which prosecutors have called more than 25 witnesses and presented hundreds of exhibits. Slade, who began working for the mine owners in 2010 and stayed through 2011, was the sole defense witness.

He said he was thrilled when he was recruited to work on resurrecting the old platinum mine in one of Alaska's historic mining areas. The new team inherited piles of sediment and waste materials dredged from earlier operations.

"We were looking at this as a multiyear reclamation project," Slade told jurors, speaking in a clear, calm voice over hours on the stand. "We had designs to put the whole river back the way it was."

Of the other four men charged in the environmental crimes case, two have pleaded guilty and testified against Slade. But the Australian lawyers who led XS Platinum – Bruce Butcher and Mark Balfour -- have refused to come to the United States to face charges. Slade said Balfour was ultimately responsible for environmental compliance and that XS Platinum also relied on an environmental consultant later replaced with a company employee to save money.

By the time more than two dozen federal and state authorities descended on the operation in August 2011, the operation was crumbling financially, Slade told jurors.

By that November, Butcher, CEO and president of XS Platinum, had cleared out his Seattle headquarters office and erased his emails, Slade told jurors.

"He skipped town," Slade said.

The mine's chief investor, a man named Johan Ulander, then living in Sweden, had a falling out with Butcher and Balfour over control, Slade said. Ulander fired Balfour, Slade testified.

Ulander later hired forensic accountants who found Butcher was making $1.2 million a year, Slade said. Balfour made about half that counting what he got for his living expenses, Slade said. Slade testified he made $1,000-plus a day as a consultant and also received 500,000 shares of XS Platinum stock he thought would reach $4 million in value. It's worthless now, he said.

The company executives wouldn't approve money for a key piece of equipment that would have helped clarify the water, Slade told jurors. He said he had no budget or check-writing authority and had to contact the Seattle office even to order parts for a company truck from the NAPA auto parts store in Bethel.

The mine was bringing in only about $1 million a year and cost far more than that to run, he said.

Slade testified he was the on-site senior official and designed the mine operation, using technology he developed and eventually patented. But he said he didn't have authority to shut down the mine and wasn't responsible for permits or regulatory compliance. No one ordered him to close the mine and if he had, the owners just would have ordered it restarted, he said.

Slade's lawyer, John Irving of Washington, D.C., asked him about the mine's general permit and other key documents, including a report to the government that the mine was not discharging any wastewater into the Salmon River or feeder creeks. Slade said he never read the permit and didn't remember seeing that report until the criminal case began.

When he was told about required environmental monitoring, Slade said he ordered a meter and he and his son set up the monitoring system.

Feldis brought up a July 2010 email in which Slade asked for the meter to be delivered as soon as possible so he could begin monitoring "our inconvenient truth." Slade said he was just playing off the title of the Al Gore documentary.

"Your testimony is that it wasn't a problem, that it was OK?" Feldis asked.

Slade said the discharges were taken seriously.

"It was being monitored and looked after," he said.

When he was sent a copy of the main permit, he emailed that he planned to read it over dinner because "chicks dig this stuff." That referred back to a running joke with Balfour, who did read all the documents and said "chicks dig it," Slade said.

His superiors unexpectedly hired a contractor to do the dredging, but that led to new problems, he said. The contract crews and XS Platinum crews didn't work well together in an operation that needed to run like a close family, with community meals in the dining hall and a bunkhouse with eight men packed into a room intended for four.

The contractor dug too deeply into a settling pond, making a hole in what had been a dense clay bottom, he said. The settling ponds were not lined, but he said they didn't need to be. The waste materials for placer mining don't include any toxic chemicals, he said.

The case is expected to go to the jury Monday after both sides give their closing arguments.

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