Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, May 16, 1995                   TAG: 9505160047
SECTION: VIRGINIA                    PAGE: A-1   EDITION: METRO 
SOURCE: RICHARD FOSTER STAFF WRITER
DATELINE:                                 LENGTH: Long

WHISTLEBLOWER OR CROOK?

At age 31, Billy Belcher became one of the youngest oil-terminal managers in the history of Texaco Inc. and its affiliate, Star Enterprise.

Three years later, in 1993, he was fired.

Texaco and Star say Belcher stole $56,000 while he ran Star's Montvale oil terminal in Bedford County.

Belcher, however, says he's a whistleblower who was falsely accused by Texaco because he reported criminal and environmental violations. Those violations, he claims, represent a pattern of national misconduct by the oil giant.

He's taken his claims of oil-industry misdeeds to Congress. The Environmental Defense Fund, one of the country's largest environmental groups, and the network news show "Dateline NBC" are interested in his story.

And a nationally known law firm in Washington, D.C., which specializes in suing oil companies for environmental violations, drafted a lawsuit for him two years ago alleging wrongful termination.

Culled from Texaco documents, court records, and interviews with Belcher and several other past and present Texaco employees, Belcher's story is a strange and often contradictory tale.

As a former employee of the traditionally close-mouthed oil industry, Belcher could be a valuable source of insider information, some say.

To others, he's a liar, motivated by greed and self-preservation.

A former prison guard, Army veteran and Liberty University drop-out, Billy Belcher was hired in 1986 as a terminal worker at Texaco's tank farm in Apex, N.C., just outside Raleigh.

Soon after he started work, Belcher said, he heard about a major unreported oil spill into the ground water that was the primary source of drinking water for the terminal and a small house across the road.

The water tasted so bad that Belcher said he brought water or iced tea from home. He says his supervisor told him nothing was wrong with it.

After Belcher left the terminal, its drinking water was found to be contaminated with benzene, a cancer-causing chemical in gasoline.

Around the same time that Belcher started bringing water from home, the people renting the house across the street also stopped drinking their water. Instead, they'd drive around town filling up containers with water from local businesses.

Belcher says he told them their water might be contaminated. At least one oil-industry employee still working in North Carolina confirms this, saying it was common knowledge that Belcher blew the whistle. The admission would cost Star more than $50,000.

Belcher's former supervisor - who described Belcher as "headstrong" and paranoid - said he never heard Belcher complain about the water.

North Carolina's state Division of Environmental Management tested the ground water near the terminal in 1989 and found it was contaminated and posed a slight cancer risk to those drinking it.

The same year, Star Enterprise took over the terminal from Texaco. It later installed a water cooler there and provided bottled water to the tenants across the road.

The owner of the house sued Star and received an undisclosed cash settlement. Star also agreed to add public water and sewer to the house at a cost of $45,000.

Despite what Belcher says was his role in bringing on the lawsuit, he appeared to be in Star's favor. In 1989, he was one of two candidates in Star's Mid-Atlantic region nominated for a superior performance award. And in 1990, though his supervisor said Belcher had only "average" advancement potential, Belcher was transferred and promoted to terminal manager of Star's tank farm in Montvale.

The promotion jumped his annual pay from $25,000 to $40,000.

Belcher believes he was promoted to get him out of Raleigh and to give him a financial incentive for keeping quiet about environmental problems.

`We just dug a pit'

In his first six months at Montvale, Belcher received bonuses and praise for building team spirit. He claims he also learned of waste-burial sites on Star property and of past oil spills that went unreported to state and federal authorities. He says Star executives told him to under-report leaks and spills or not report them at all.

Environmental scientists estimated one leak at Star's Montvale facility to be larger than 100,000 gallons of oil, Belcher said, but he reported it to the State Water Control Board as only a 50-gallon leak.

That way, Star would be spared the cost of a government-regulated multi-million dollar cleanup, he said.

A Texaco spokesman confirmed that a leak was found in 1992, but said it was a minor leak in a pipeline, which was repaired.

However, Mike Mollette, a contractor who worked for Star, describes oil bubbling out of the ground during heavy rains at Star's Montvale terminal. As recently as a few years ago, he says, when he was digging on Star property, he saw oil several feet deep in places under the soil. He also says he saw more than 50 gallons of oil flow into Goose Creek during a spill in the mid-1980s.

Leon Burchett, who was a Texaco and Star terminal manager at Montvale before Belcher, acknowledges some of the spills Belcher described, but says he notified the State Water Control Board about them. The board, however, has no record of those spills.

A Texaco spokesman said the terminal had "no significant releases" during the mid-1980s.

But Burchett, who's now retired, recalled in particular one spill during the flood of 1985 when an underground storage tank overflowed into Goose Creek. He said about 50 gallons of oil washed down the creek.

Burchett also says that he and other Texaco workers would bury waste oil on company property.

"We just dug a pit and then dumped it in and of course, eventually it'll get into the creek [through the ground water]. We knew that," he said.

The waste burial started in the 1960s and probably went on until the mid-1980s, said Burchett, who believes the laws at the time allowed Texaco to bury waste on site. They didn't mark the burial sites and didn't keep records, he said, adding that he doesn't recall how many burial sites there were.

State and federal officials as well as oil industry analysts all say that, before the 1970s, most oil companies buried waste oil. Some sold it to farmers, who used it to keep dust down on dirt roads.

There have never been any federal laws prohibiting Star or any other oil company from burying gasoline in the ground, but state law prohibited dumping oil into surface waters such as Goose Creek as early as 1973.

The practice of intentionally dumping oil onto any land or into any water, including ground water, is now illegal in Virginia.

Polluters can be fined up to $100 for each gallon dumped and be convicted of a misdemeanor punishable by up to 12 months in jail.

If the State Water Control Board finds out about past oil burials, it can force companies to clean up the contamination. But, paradoxically, the only way the Board can find out about contamination is if an oil company reveals it, usually in a site characteristic study required by the state.

Star hasn't disclosed any oil-burial sites in Montvale in its reports to the state.

In 1990, according to State Water Control Board records, one of the closest monitoring wells Star has to Goose Creek showed levels of benzene that were more than 70 times above safe levels for drinking water. Goose Creek is listed by the state as a drinking water source.

A 1988 Virginia Supreme Court case in which Texaco was a defendant seems to back up Burchett's claim that burying waste was a common Texaco practice.

In the 1970s on a site in Richmond, Texaco buried several pressurized cylinders of pentaborne, a chemical 2,000 times more deadly than the chemicals used in gas-chamber executions.

Texaco later sold the property without disclosing that it had buried waste there. When Phillip Morris Inc., the new owner, discovered the cylinders, Texaco refused to identify the chemicals it had buried.

Rescue workers and others later became ill when a waste disposal company tried to destroy the cylinders. The state Supreme Court found Phillip Morris, not Texaco, liable for damages.

The Texaco spokesman said it was "possible" that Texaco employees at Montvale had buried sludge from tank bottoms on-site. But he said they never would have buried free-flowing gasoline and they would only have buried waste if state and federal laws allowed them to do it.

Keeping a diary

Apart from possible environmental violations, Belcher said he also became aware of financial improprieties at Star's Montvale terminal.

When he started balancing the books there, he noticed invoices to Star from a Pennsylvania supply company asking for $300 or more for a few cans of bathroom cleanser. Another invoice requested $1,000 for a case of hand cleaner.

Belcher sent the invoices back, saying he hadn't made the orders. He believes other employees at the terminal were inflating invoices in exchange for cash kickbacks from suppliers.

Bedford prosecutors agree that kickbacks were being taken at the terminal, but they say it was Belcher who took them.

During a preliminary hearing on the embezzlement charges, Ed Mills, a Star contractor, testified that he had given cash kickbacks to Belcher in exchange for business during Belcher's two years at Montvale.

Mills said he submitted false invoices to Star and paid Belcher between $700 and $1,500. Mills was not granted immunity for his testimony and he has not been charged with any crime.

Belcher denied receiving cash from Mills for his personal use.

In November 1992, Star dispatched its corporate chief of security, Bruce List, from Houston to Montvale.

List was investigating whether Belcher had been reporting oil spills to firefighters and news reporters in North Carolina.

In 1992, the Apex, N.C., fire department and the local newspaper received several anonymous phone calls from a man claiming to be a Star employee. The caller said Star managers in Apex were trying to cover up a 1,000-gallon oil spill.

An investigation revealed there had been a spill - about 100 gallons of gasoline had spilled from a storage tank as workers pumped rainwater out of it. Though the spill had not been reported, government probers said they were satisfied with Star's clean-up.

The phone calls were traced to Star's Montvale terminal and the investigation pointed to Belcher, though it was never proven who made the phone calls. Belcher denies any involvement.

When List interviewed Belcher, Belcher told him that if he'd wanted to get Star into trouble he could think of better ways than making false reports of oil spills.

He told List he knew of many real violations, environmental and criminal, that he could divulge. He also said he had kept a diary of environmental violations by Star employees in North Carolina.

About two weeks later, Star ordered Belcher to appear in Raleigh, N.C., before a panel of Star lawyers and executives to give a deposition in connection with the drinking-water lawsuit.

They grilled Belcher for more than a hour, he said, asking him what he intended to do with the diary. They also asked him if he knew of environmental violations not recorded in the diary.

Belcher told the executives of several unreported spills at the Apex terminal. He also told them the diary was missing and he had discussed its contents with a Roanoke lawyer.

A little more than a month later, two Star executives came to Montvale and relieved Belcher of duty. They said he was suspended until problems at the terminal could be thoroughly investigated.

They also asked Belcher to get psychological testing. Belcher says they accused him of having deviant sexual urges and suicidal and homicidal tendencies.

Over two days, Dr. Tomas V. Mariano, a Roanoke psychologist, examined Belcher. In a letter to Texaco, Mariano reported that while Belcher exhibited signs of emotional stress, he was "a well-functioning individual with no major personality disturbances."

Mariano also said he saw no evidence of suicidal or homicidal tendencies in Belcher.

In February 1993, a Star executive called Belcher and ordered him to meet the corporate security chief for an interview. Belcher refused unless he could have an attorney present.

The executive told Belcher he could discuss the interview with an attorney later but he could not have one present at the questioning. Belcher declined the meeting. He also told the Star executive that he had been discussing Star's environmental problems with an out-of-state attorney.

A few days later, Belcher was fired. Star cited insubordination as well as financial wrongdoing. The oil company said Belcher created fraudulent invoices, overpaid contractors for work they did not perform, and personally hired contractors to do work at his home, which was against Star policy.

Sex enters case

Belcher had been meeting with the Washington D.C.-based firm of Cohen, Milstein, Hausfeld and Toll - the same firm that negotiated a $50 million cash settlement for Fairfax County residents who were affected by a massive leak discovered at a Star Enterprise terminal in 1990.

Belcher says Star knew he was meeting with the firm and he claims he received death threats by phone and mail, warning him to back off. FBI agents in Lynchburg investigated one note but came up with no leads.

In the months after he was fired, Belcher also met with staffers of Rep. John D. Dingell, D-Mich., about testifying before Congress. The lawsuit and the testimony were both tabled in the summer of 1993 on the advice of the law firm, when Belcher was arrested for embezzlement and an apparently unrelated charge of attempted rape.

The sex charge, which was thrown out of court for lack of evidence, was brought by a woman whose sons Belcher had coached in baseball and basketball. Years earlier, the woman had brought a charge of abduction against another man, which was also dismissed.

Belcher says he barely knew the woman and he suspects Star's involvement because her name showed up in connection with him in a Star security report that predated her charges.

It wasn't the first time Belcher had been accused of sexual misconduct. When he worked in North Carolina, the local sheriff's department investigated a rape complaint that was dropped for lack of evidence.

At Montvale in 1992, a saleswoman visiting the terminal claimed Belcher offered to give her business in exchange for sexual favors. Her superiors complained to Star.

Belcher says he's a faithful family man and he believes the sex charges were engineered to destroy his credibility.

To Belcher, the conspiracy is wide-ranging, and includes lawyers and Texaco managers who he says have all worked to frame him for embezzlement.

A prime example is his first lawyer, Belcher says, who dumped him as a client because Belcher couldn't afford the fees. That lawyer then took on a key prosecution witness against Belcher as a client.

Star says Belcher set up a fake business and, over three years, wrote and cashed checks to it totaling $56,000. Belcher says his business was legitimate and he started it only at the urging of Star executives who offered it as a way to make extra money.

At the time, Belcher was in debt to the Internal Revenue Service for $19,000 in back taxes.

Belcher and Burchett both say it wasn't unheard of for Texaco employees to own businesses that did work for Texaco. They point to a Star employee who ran his own trucking business, delivering gas to Texaco customers, in direct competition with Texaco-approved drivers.

Texaco executives knew what the moonlighting employee was doing was against company policy, Burchett said, but they let him do it anyway. They pulled the plug on his business only after other drivers started complaining that he was taking business away from them.

Belcher started his company in 1991 and named it J & B Equipment. He said he did "countless hours" of work on the side as J&B, making plans about how to upgrade Star facilities across the nation.

That's a sharp contrast to the invoices he submitted to Texaco, however, which describe the work as repair jobs such as valve replacements and light installations.

Belcher and his wife reported the income from J&B on their tax returns. Belcher says he wrote letters to Texaco accountants informing them that he worked for J&B.

He also points out that when a Texaco auditor discovered J&B was receiving payment from the wrong department, Belcher started submitting J&B's invoices to the correct one.

Texaco executives, however, said the audit did not reveal that Belcher owned J&B. His wife was listed as J&B's owner.

Late last month, Belcher and Texaco came to a stalemate of sorts. Belcher was convicted on one felony count of embezzlement after he entered an Alford plea - a special plea used when a defendant does not admit guilt but acknowledges that there is significant evidence against him.

In exchange for his plea, Belcher will probably receive a suspended prison sentence. The court will make its final decision on July 17 after reviewing his pre-sentence report.

Now Belcher has his sights set once again on suing Texaco. He also wants to talk to environmental groups and offer them his knowledge of oil-company practices.

"I feel we have a good civil case," Belcher said. "We've confirmed that I complained about the benzene in the drinking water in Raleigh. I'm hopeful that some law firm will be willing to take me on and take this case on, because I feel it has good merit."

As Belcher's battle against the oil giant ends in Bedford County, those who watched from the sidelines remain confused as to what really happened.

To some, Belcher was a churchgoing man, known for coaching his sons' sports teams. He'd give you the shirt off his back, they say, and they respect him for taking a stand against Texaco.

But to others, Belcher had a dark side, hidden in shadow and marked by blackmail, threats, and rage.

"Somebody said one time to me that it looked like there must be two Billy Belchers, two personalities" said Burchett, the former Montvale terminal manager. "From what I've heard, there's got to be two Billy Belchers."

Randy Krantz, the prosecutor, said, "Whether he was induced into it, or whether he chose to do it on his own, I do think Mr. Belcher stole money from Star Enterprise. That in and of itself justifies him being a convicted felon."

But Krantz added, "A jury may have had a hard time sorting out whether Billy Belcher was a sinner or a saint."

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