WASHINGTON >> Federal regulators are failing to refer serious safety violations involving freight rail shipments of crude oil and other hazardous cargo for criminal prosecution, and are going lightly on civil fines, according to a report released Friday by a government watchdog.

The Federal Railroad Administration routinely applies only modest civil penalties for hazardous materials safety violations, even though inspectors request penalties only for serious or repeated infractions, said the report by the Department of Transportation's inspector general.

Instead, the agency's attorneys have made it a priority to process penalties quickly and avoid legal challenges, the report said.

And, although the agency processes hundreds of safety violations each year, it appears that not a single case has ever been referred for criminal investigation, the report said. After examining a random sample of safety violations over five years, the inspector general's office found 17 cases it said should have referred for criminal investigation.

Few criminal referrals

Based on that sample, the inspector general's office estimated 20 percent, or 227 out of 1,126 violations, may have warranted criminal referral. The agency's attorneys told the watchdog that they didn't make criminal referrals because they didn't know the procedures for doing so, and they didn't think it was part of their job.


"As a result, penalties have little deterrent effect, and criminal penalties aren't being pursued," wrote Mitchell Behm, assistant inspector general for surface transportation.

Concern about rail shipments of hazardous cargo has been heightened in recent years by a series of fiery oil train explosions in the U.S. and Canada, including one just across the border in Lac-Megantic, Quebec, that killed 47 people. More than 400,000 tank cars of oil are shipped across the country annually.

Rep. Peter DeFazio of Oregon, the senior Democrat on the House Transportation and Infrastructure Committee, said the report confirms "that the federal government has failed to provide the necessary oversight to protect communities across the country from serious accidents involving the rail transportation of hazardous materials."

One case the report said should have been referred for criminal investigation involved a company that produced tank car valves that hadn't been put through a required design approval process. The valves subsequently leaked hazardous liquids. In another case, a company may have deliberately failed to disclose that a shipment included radioactive containers.

Matt Lehner, an FRA spokesman, said most of the inspector general's recommendations are being implemented. He noted that the agency collected $15 million in fines for violations in the 2015 federal budget year, a 12 percent increase over the previous year and the most in the agency's history

The inspector general's office also found that the agency doesn't have a complete understanding of the risks of hazardous cargo shipments because the agency makes safety assessments by looking narrowly at operations in specific regions, not the nation as a whole.

The regional evaluations also don't include an assessment of the risks of transporting highly volatile and hazardous materials like crude oil near cities and major population centers, the report said.

Without an accurate national assessment, the railroad administration can't be sure that all the appropriate risk factors are being considered when deciding which operations are most in need of inspections, the report said.

The inspector general also faulted the agency's complex records system, saying it makes difficult for inspectors to access safety information on rail operations outside their region. As a result, the railroad administration and a sister agency, the Pipeline and Hazardous Materials Safety Administration, don't share critical and up-to-date information with safety inspectors and investigators in different regions throughout the country.