50 



balanced with technology development policy, all for the good of 

 the environment. 



Thank you for this opportunity. 



Chairman Glenn. Thank you. 



I thank all three of you. Dr. Gage, on the prevention versus 

 clean-up debate. I have always thought that was an area that could 

 be very fruitful, if we ever got into it. I don't quite know how we do 

 it, because a lot of the industrial processes we wind up having to 

 clean up after, later on become very expensive. I don't know if we 

 have any way of submitting them in advance or something? It 

 seems to me we just have to have an awareness in this area. 



Perhaps one thing is to have EPA be far more stringent in ad- 

 ministering its penalties and not negotiating them down when 

 there are violations, and that makes businesses then think twice 

 before they just dump something out in the open. Is that a way of 

 approaching this, or what is a better way of doing it? 



As in medicine, we all know we should get a check-up once a 

 year as a means of prevention, instead of waiting until we get sick 

 and then trying to cure it, and you can make that same analogy 

 with respect to the environment. How do we handle that? 



Dr. Gage. I think very definitely strict penalties are playing a 

 major role in changing the mindset of many of the leaders of 

 American industry. 



Chairman Glenn. One of the problems is they have been strict. 

 That is a problem. They are strict on paper and then they negoti- 

 ate them down. We had a hearing on that and it was absolutely 

 atrocious. I think the fines collected are something like 15 percent 

 of the original fines, on the average. 



Dr. Gage. Well, the financial aspect is one thing. There is also 

 another bracing thing that I know has fixed the minds of many 

 CEO's around the country, and that is that a few CEO's have been 

 sent to jail. They are serving time behind bars and there is nothing 

 that has quite concentrated the minds of some of our CEO's as with 

 that prospect. 



Chairman Glenn. That would be only the most extreme cases, 

 though, where you would send somebody to jail. 



Dr. Gage. Right. 



Chairman Glenn. I think what we are looking for is day-in and 

 day-out, how do you make people aware that a new process 

 may 



Dr. Gage. I think that a lot of the company presidents are also 

 reading the tea leaves, that in fact things will get stricter, that 

 there has probably been a decade of relative laxness here in appli- 

 cation of fines, and that the companies themselves, including the 

 CEO's, as officers of the companies, may face long-term financial 

 liabilities. As I spoke in my testimony about risk, this has entered 

 into the risk calculation, the financial risk calculation in compa- 

 nies and is having a very significant impact. 



You can read the speeches of the CEO of 3M, Dow Chemical and 

 a number of these companies that state very clearly that what they 

 are trying to do is to minimize their long-term financial risk and, 

 thus, put the company in better financial shape by undertaking 

 pollution prevention programs. They also end up in many cases 

 saving money, and driven by the bottom line here, they are in 



