Thursday, September 23, 1999
DAVID WHITNEY, Daily News Washington Bureau

WASHINGTON - Two quality control managers overseeing construction work on the trans-Alaska oil pipeline have lost their jobs under a campaign by Anchorage-based Alyeska Pipeline Service Co. to rid the company of personnel problems that have delayed safety repairs. In addition, the manager of the trouble-plagued, tanker-loading terminal at Valdez has been assigned to a new job. Alyeska officials said that was a planned move and not a demotion. Company president Bob Malone has warned Alyeska employees in recent days that those who allow safety and construction problems to go unrepaired will lose their jobs. Alyeska confirmed the job moves on Wednesday, just as a new report revealed continued resistance among some employees to address pipeline-system safety.

Despite years of hearings and promises, the report concluded the company's quality assurance system still fails to guarantee that construction and repair work is done right. The report by Little Harbor Consultants analyzed safety concerns raised by company whistle-blowers in July. It was commissioned by Malone, who was in Washington this week to distribute copies to congressional overseers and federal regulators.

The pipeline carries about 1.1 million barrels of oil daily from Alaska's North Slope. The most recent safety concerns have been over whether the fire-suppression system at the tanker terminal is corroded and not fully operable. Alyeska insists that none of the problems by themselves are serious enough to warrant shutdown of systems or to collectively undermine pipeline safety.

"The pipeline is safe," Malone said Wednesday.
The whistle-blowers, calling themselves the "Group of Six," say they are mostly mid-level Alyeska managers. Jim Whitaker, who worked at the Valdez terminal, is the only one who has identified himself. Chuck Hamel, a former Virginia oil broker and frequent Alyeska critic, serves as the group's spokesman and conduit. Particularly disappointing, the Little Harbor report said, is that problems raised by the whistle-blowers had been brought to the attention of the appropriate supervisors, who then did nothing.

Malone said earlier this week that he is on a tirade to weed out employees who think they can ignore or subvert company policy.

"I have said that if you cannot support these policies with the company, the direction set by your president, then you are no longer welcome in this company," he added Wednesday.
"I've got to be clear with my expectations because at this point forward appropriate action is going to be taken, and I don't want there to be any doubt in any mind about how I feel," Malone said.

Asked whether any employees had been fired, Malone replied: "My answer would be that we've had changes in the organization, but where I've drawn the line, not yet."

On Friday, however, Alyeska announced in a companywide e-mail that the quality assurance and inspections programs were being merged under a new chief. John Streeter, a Little Harbor consultant trained in the nuclear power industry, will temporarily hold the job.

That change ended the Fairbanks job of Ron Sacco, who had headed quality assurance along the pipeline, and Larry Blachut, the quality assurance program head at Alyeska's tanker loading facility at Valdez.

Sacco could not be reached for comment. But Blachut said in a telephone interview that he and Sacco were called to Anchorage on Friday for separate meetings with Denis LeBlanc, an Alyeska vice president. Both are now unemployed, Blachut said. "They call it terminated," Blachut said . "They were fairly generous on a severance package." He said he did not know why he was replaced. The Little Harbor report does not name individual quality assurance managers but said the program had not been implemented consistently and problems that should have made it up the chain of command didn't.

Dan Hisey, senior vice president of the company's Valdez business unit, confirmed late Wednesday in a telephone interview that Sacco and Blachut had been "relieved of duty," but he said they could accept other jobs with the company until January. "The recognition here was that we had not moved the quality program forward like we had wanted to, and those guys were in key leadership positions," Hisey said.

On Monday, Valdez terminal manager John Baldridge was reassigned to a position called "adviser to the terminal." He was replaced by Greg Jones, who had been in charge of the company unit that escorts tankers and responds to oil spills. Hisey said Baldridge's move was not related to the quality assurance problems. "John is now my operations adviser," Hisey said. "He works on a lot of the technical stuff. It was not in any way a demotion for John."

Hamel, the voice of the "Group of Six," said Wednesday that the whistle-blowers reard Malone's actions a start, but that "he is scratching the surface."

Hamel and Malone met for dinner Tuesday night on the Alexandria, Va., waterfront. Hamel said the dinner was pleasant, but added that he thinks the pipeline owners, not Malone, are the problem. Alyeska operates the pipeline for seven oil companies that own pieces of North Slope production.

Malone called the meeting with Hamel "cordial and courteous." He said that while he regrets that employees have had to turn to Hamel to get their concerns addressed, the Little Harbor report proves that internal processes inside the company failed them. "It's hard for me to say anything but to go to Chuck Hamel because you were not able to get satisfaction within the company," he said.

Malone has delivered his get-tough message to company executives in Anchorage and employees in Fairbanks. Today (Thursday) he may face his toughest audience, workers at the Valdez terminal where the highest proportion of the problems have occurred.

Still, Malone said he has been inundated with e-mail from employees applauding his efforts.

* Reporter David Whitney can be reached at dwhitney@adn.com

Related Links
  • Anchorage Daily News-- The Anchorage Daily News Website
  • Alyeska-- Alyeska Pipeline's Website
  • Group Of Six-- "Group of Six" led by spokesperson Charles Hamel


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