“Whistleblower” Changes Story in Deposition

Almost a year after making numerous accusations about Imperial Sugar Company,
former Vice President of Operations Graham H. Graham provided a very different
account in sworn testimony given in depositions that occurred in April and July
of 2009 in connection with citations issued by OSHA. This most recent testimony
is notable in its striking dissimilarity to Graham`s prior statements regarding
his warnings (or lack thereof) to management, the condition of the Port
Wentworth facility prior to the explosion, and even his own knowledge of the
properties of combustible dust.

The details were made public is a statement by Imperial Sugar Company and reported by Reuters, the news wire service.

Specifically:

* In Mr. Graham`s testimony before the Employment and Workplace Safety
Subcommittee of the Senate Health, Education, Labor and Pensions Committee, he
stated he had “absolutely” warned Imperial about the “explosive” dangers of the
sugar dust at the facility.[1] Graham now admits that he never warned anyone at
Imperial about the combustibility and/or explosive character of sugar dust prior
to the February 7, 2008, explosion: not Imperial`s CEO, John Sheptor, not any
member of the Board of Directors, not any member of the safety team, not any
member of management, and not any employee.[2] In fact, Graham testified that he
did not believe that the sugar dust he observed at the Port Wentworth facility
created an imminent danger.[3] Moreover, Graham admitted that on his tour of the
Port Wentworth facility just days before the accident, housekeeping was much
improved from his prior visits and that sugar and sugar dust had been removed
and cleaned in all areas of the plant he toured.[4]
* In his prior testimony, Graham claimed significant knowledge and experience
regarding the combustibility of dust. As evidence of his knowledge, Graham
claimed that, prior to his employment at Imperial, he had researched and studied
the National Fire Protection Association (“NFPA”) standards related to
combustible dust.[5] However, in his deposition on April 30, 2009, Graham
admitted under oath that he had not read the NFPA standards on dust or
electrical classification, OSHA`s National Emphasis Program on combustible dust,
or the 2006 CSB combustible dust study until after the February 7, 2008,
accident.[6] Graham further tried to diminish his prior knowledge and experience
regarding combustible dust and its properties by testifying that he was “not a
dust explosion expert.”[7]
* In his first sworn statement to OSHA, Mr. Graham claimed that he had made
various observations regarding deficiencies in venting, dust collection systems,
and electrical classification during his plant visits prior to the 2008
accident.[8] By contrast, in his later deposition in the OSHA case, Mr. Graham
now disclaims all knowledge of such deficiencies prior to the explosion, stating
he did not look at these areas or issues during his plant visits prior to the
February 7 accident.[9] Additionally, even if Mr. Graham had made such
observations, he testified that he might not have taken any action because,
depending on what the observation was and if there was already a capital
expenditure application in process, “then I`m not sure what else I could have
done.”[10]

In addition to the inconsistencies in Mr. Graham`s statements, some of his
statements lack supporting evidence and are directly contrary to the evidence of
record. Specifically,

* Although Mr. Graham claims he was told he was “too passionate” and was
counseled by Imperial to mute his criticisms regarding safety by Imperial,[11]
no document and no witness substantiates this claim. In fact, the issue
resulting in Mr. Graham`s counseling was an ethics complaint lodged against him
complaining that Mr. Graham threatened an employee that he would lose his job
unless the employee got production back running within the hour.[12] In response
to these allegations, and despite being given a copy of the ethics complaint at
the deposition, Mr. Graham simply claims “There weren`t any ethics complaints,”
“[T]he whole thing is fabricated,” and “These are fabricated …”[13]
* Also, although Mr. Graham suggests that he was somehow instructed by Imperial
to limit his efforts on safety, the documents and emails created by Mr. Graham
and sent to and from him leading up to the February 7 incident tell a very
different story – the documents show that in fact Mr. Graham was under
consistent and frequent direction to improve safety, he was supported in his
efforts, and he was reporting positive results. For example:

* November 16, 2007, email from John Sheptor to Mr. Graham in response to Mr.
Graham`s report of his visit to Port Wentworth, in which Mr. Sheptor states
“Thanks Graham – no surprises. You have my full support.”
* In response to a request from then Chief Operating Officer John Sheptor, Doug
Sikes prepared a corporate housekeeping policy. On his own accord, on November
26, 2007, Mr. Sikes forwarded Mr. Graham a draft copy asking for Mr. Graham`s
review and feedback. Mr. Graham admits that he never reviewed Imperial`s
housekeeping policy prior to the February 7 incident.[14]
* November 30, 2007, email from Mr. Sheptor to Mr. Graham in which Mr. Sheptor
directs that Mr. Graham make part of his group`s 2008 Manufacturing Objectives
to “[a]chieve a 50% reduction in associate and contractor OSHA recordables at
their assigned site.”
* December 14, 2007, email from Bob Peiser to Mr. Graham: “Great start at both
plants, Graham. Thanks for stepping up so quickly.”
* January 17, 2008, email from Mr. Graham to the Port Wentworth plant, noting
that “Feedback from Kay [Hastings] was that the plant is distinctively cleaner
and tidier. So pass on my congratulations to all of your team. The effort is
paying off because visitors have noticed a positive improvement. Weel (sic) done
to everyone who is making this contribution to a cleaner, safer workplace.”
* January 25, 2008, email from Mr. Graham. In response to Mr. Sheptor`s question
of “[h]ow have your visits to the refineries been this week? What are your
observations?” Mr. Graham replied, “Very successful. . .plants have made
enormous improvement especially in housekeeping. Actually even better than I
expected at Savannah.”
* January 25, 2008, email from Mr. Sheptor to Mr. Graham asking Mr. Graham to
schedule a half-day meeting in March to review Mr. Graham`s “3 year plan for
achieving operations excellence,” with Mr. Sheptor asking Mr. Graham to address
“how we will … become an industrial leader in ESH [environmental, safety and
health].”
* January 31, 2008, email from Mr. Graham showing an almost 50% reduction in the
Company`s OSHA recordable rate as compared to the same quarter of the previous
year, stating “Please share this excellent progress with the managers and
associates. Well done to everyone.”
* February 5, 2008, email exchange between Mr. Sheptor and Mr. Graham, in which
Mr. Sheptor gave an example of another facility where he had worked that had
turned around their safety program and had gone “5 years without an injury.” In
response, Mr. Graham replies: “Truly an awsome (sic) turnaround. Of course, only
possible when top down management support is felt throughout. It won`t be long
before we have the key managers in place and then the real work begins.”
* February 7, 2008, meeting request to Mr. Graham from Deborah Haban, requesting
a meeting “to review the FY08 Safety Action Plan originally built in October
(beg FY08) with John`s [Sheptor`s] focus on safety objectives/initiatives from a
corporate/plant level.”

Finally, in his recent testimony, Mr. Graham concedes that in the days and weeks
leading up to OSHA`s inspection of Imperial`s Gramercy facility, he was
specifically dispatched to ensure the safety of Gramercy,[15] he was never
denied resources to do so,[16] and was reporting back positive results.[17]

Imperial will continue to actively communicate with our employees, the
communities in which we operate, and our other stakeholders through channels
that offer us an opportunity to do so in a fair and balanced manner.

“Imperial is defending itself in the court of law,” said Steven Behm, a
spokesman for Imperial Sugar. “Similarly, if allegations are brought forward in
the court of public opinion, they should be based in fact. Imperial values its
relationships with its employees, its partners and the communities in which it
operates and believe they should have access to the facts.”

[1] Graham H. Graham Senate Testimony taken July 29, 2008 pp. 49-50.

[2] Graham H. Graham Testimony taken April 30, 2009, pp. 211:15-212:2, 102:1-14,
127:12-129:16, 131:5-23, 188:23-189:3, 223:2-20, 225:6-14.

[3] Graham H. Graham Testimony taken April 30, 2009 pp. 219:14-19.

[4] Graham H. Graham Testimony taken April 30, 2009 pp. 212-220 (Port Wentworth)
and July 11, 2009 (vol. III) pp. 105-107 (Gramercy).

[5] Graham H. Graham Sworn Statement to OSHA taken June 11, 2008 pp. 59:1-59:9,
61:4-63:14; Graham H. Graham Senate Testimony taken July 29, 2008 pp. 50-51.

[6] Graham H. Graham Testimony taken April 30, 2009 pp. 56:13-24 (NFPA 61);
57:4-57:11 (NFPA 654); 57:12-14 (NFPA 499); 60:24 — 61:5 (OSHA NEP); 61:9 -
61:18 (2006 CSB Study).

[7] Graham H. Graham Testimony taken July 10, 2009 (vol. II) p. 41:19-23.

[8] Graham H. Graham Sworn Statement to OSHA taken June 11, 2008 pp. 36-38).

[9] Graham H. Graham Testimony taken April 30, 2009, pp. 91:16 – 92:9, 129:20 -
131:4, 220:5 – 220:23.

[10] Graham H. Graham Testimony taken July 9, 2009 (vol. I) p. 47:13-23.

[11] Graham H. Graham Senate Testimony taken July 29, 2008, pp. 46.

[12] Graham H. Graham Testimony taken April 30, 2009, p. 172-173.

[13] Graham H. Graham Testimony taken April 30, 2009 pp. 172-175.

[14] Graham H. Graham Testimony taken April 30, 2009 p. 86:3-9.

[15] Graham H. Graham Testimony taken July 9, 2009 (vol. I) p. 37:20-24.

[16] Graham H. Graham Testimony taken July 9, 2009 (vol. I) p. 55:13-14.

[17] Graham H. Graham Testimony taken July 9, 2009 (vol. I) pp. 24:25 – 25:5;
March 23 email from Graham to John Sheptor.