ALBANY, N.Y. - The penalties exceeded the costs 12-fold in a settlement reached Wednesday by New York Attorney General Andrew Cuomo and HSBC Bank USA.
Regarding the cleanup of an abandoned Westwood Chemical Co. chemical manufacturing facility in Wallkill, HSBC Bank will pay the $68,000 in costs incurred by the state and pay $850,000 in civil penalties.
HSBC seized Westwood's operating funds in 2004, and Westwood left behind hazardous waste, chemical products and wastewater.
"Protecting the environment is paramount to the bottom line," Cuomo said. "This settlement is groundbreaking in that it sends a strong message that lenders cannot ignore toxic cleanup laws by simply seizing a company's operating funds and leaving it without the financial ability to be in compliance with environmental laws and ensure public safety.
"It also ensures that the threat posed to the public by HSBC's insensitivity to the environment does not happen again."
Cuomo says that at the abandoned factory, heat was not maintained during winter. That led to pipes freezing and the fire suppression system breaking. Numerous chemical containers froze and leaked.
In Feb. 2005, a building inspector revealed the alleged dangers. HSBC will implement a new internal environmental training program to educate its employees on environmental compliance obligations of companies facing financial difficulty and of the lenders' responsibilities as a result of the settlement.