Developers accused of marsh filling Companies involved in St. Charles project deny U.S. charges; Law is under attack; Defendant alleges 'regulatory abuse' by federal officials


In a case likely to fuel the fierce debate over government regulation of wetlands, the developer of a Columbia-style planned community in Southern Maryland has been indicted by a Baltimore federal grand jury on charges of illegally filling 70 acres of environmentally sensitive marshy areas.

The U.S. Attorney's Office announced yesterday that it had unsealed an eight-count indictment against Interstate General Co., its chairman, James J. Wilson, and a related firm involved in the development of St. Charles, a 9,100-acre planned community near Waldorf in Charles County.

The indictment charges that from 1989 through 1993, the developers knowingly filled federally protected wetlands at four sites near streams that drain into the Potomac River, the Chesapeake Bay's second-largest tributary.

The prosecutor also filed a civil suit yesterday in U.S. District Court seeking to enjoin the companies from any more development in federally protected wetlands without permission.

Gregory G. Kreizenbeck, IGC's president, called the legal action "outrageous" and predicted that his firm and its chairman would be found innocent. He contended that federal environmental officials had approved the company's development plans in 1976 and later "flip-flopped."

"This is exactly the type of regulatory abuse that has led to calls for congressional action to clarify the wetlands laws," he said.

If convicted, the firms can be fined up to $500,000 for each felony, and Mr. Wilson faces up to three years in prison and a $250,000 fine for each felony count.

Mr. Wilson was out of the country and not available to comment, a company spokesman said.

Mr. Kreizenbeck -- who was not with IGC at the time -- said the land in question had been drained for development. While the areas were marshy, he said that experts advised the firm that the sites did not meet the federal government's legal definition of wetlands. Neither is it illegal to drain wetlands, he contended.

But Lynne A. Battaglia, the U.S. attorney, said company officials knew they were developing wetlands and intentionally broke the law. The indictment says IGC and Mr. Wilson ignored repeated warnings from local officials and their own experts to seek federal wetlands permits.

This is the second major wetlands case brought by federal prosecutors in Baltimore in the past four years. A Virginia marine engineer served six months in prison in 1992 for filling 86 acres of wetlands at a private hunting preserve in Dorchester County.

Spurred by such criminal prosecutions, controversy has grown since the late 1980s over government efforts to protect wetlands on private property -- especially those that do not readily appear to be marsh or swamp.

"Wetlands are nature's way of filtering and purifying water," said W. Michael McCabe, mid-Atlantic regional administrator for the Environmental Protection Agency.

"When these natural systems are destroyed, local communities must step in and build expensive water treatment plants to duplicate what nature does for free."

Farmers, developers and other landowners object to government restrictions on the use of their property, however, and Congress now is mulling legislation that would remove restrictions on many wetlands.

"Politics plays no part in our decision to prosecute," Ms. Battaglia said.

She said the case was brought because prosecutors believed the developer intentionally violated existing laws. "Now if Congress wants to change that, it will," she said.

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