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Owner of radioactive facility has rocky history: State doesn’t check compliance background for that kind of permit

By Katherine Lymn

KILLDEER — The operators behind a Killdeer radioactive waste handling facility recently shut down by the state had a rocky history. But that’s not something the health department would catch in the permitting process.

The founder of Dyad Environmental, Daniel McNair, and the company itself show up in court records around the country.

However, North Dakota health officials said the radioactive license permitting process doesn’t include a step to check the background of the companies.

Scott Radig, director of the state Health Department’s Waste Management division, said the radiation control permit Dyad received requires no background check of compliance issues. He noted the most recent activity, an indictment in Alaska, took place after the permit was issued anyway.

“The health department, in some cases, is required by law to review a compliance history of companies when they get permits,” Radig said. “That did not directly come into play in this situation, although we had been made aware of some of the issues early on in their history in Idaho.”

For other permits — like for a landfill — the state checks back five years for any legal noncompliance issues, he said.

In the 1990s, McNair, now 58, was convicted of money laundering in Idaho, where he went to jail. He was recently indicted in Alaska on 14 fraud and theft charges alongside his son, whose name is also Daniel.

Dyad , registered to current CEO Jake McNair at the time, was also brought to court in 2012 in Colorado over breach of contract.

“I definitely would think that they should do a thorough background check before issuing any type of permits,” Killdeer Mayor Dan Dolechek said. “I’m all for giving people a second chance and things, but it sounds like a lot of these prior problems were kinda something that I would not like … to see near Killdeer anyway.”

Dyad has posted a statement on its Facebook page and made statements to the media but hasn’t yet directly responded to the health department, Radig said.

The state will next issue a formal notice of violation, which lists areas out of compliance. Dyad will have to reply with an explanation of how it is back in compliance, Radig said.

Jake McNair, the current CEO of Dyad, said in an email that Daniel McNair is respected by the company and “looks forward to vindicating his name regarding these allegations from 2008.”

The state issued an emergency stop order to the company’s Killdeer facility Thursday after inspections showed Dyad allegedly failed to properly store and track disposal of the technologically enhanced, technologically enhanced naturally occurring radioactive material (TENORM). The facility handles primarily filter socks, a common byproduct of the oilfield that can contain radiation.

“It’s truly amazing that they don’t (do background checks). I mean, how can we as people who live in North Dakota have any confidence in the people that they give a license to unless we understand that those people understand that they know what they’re doing?” asked Darrell Dorgan, an environmental activist. “It’s ridiculous.”

When asked about the company’s history, Jake McNair downplayed Daniel McNair’s involvement in Dyad now. He said Daniel was an officer in the company and began retiring six months ago.

“He currently provides technical consulting support with permitting on an as needed basis,” Jake McNair wrote in an email.

Daniel McNair did not return a call seeking comment. His LinkedIn profile lists him as the founder of Dyad Environmental. It also states he served as CEO of DMC Technologies, the company he was indicted under in Alaska.

The health department has only dealt with Daniel McNair.

“As far as we’re concerned, everything still falls to Dan McNair,” said Dale Patrick, who signed off on the permit as manager of the state’s radiation material licensing and inspection program.

Patrick said this incident won’t change how the state processes radioactive control permits, as the purpose is to ensure the applicant will operate under regulations.

But Dorgan said the Killdeer incident raises serious concerns.

“How many companies out there are operating that haven’t been checked?” he asked.

Legal woes

Legal issues for Dyad and the McNairs span years and the country.

McNair served six months in jail and paid more than $100,000 in restitution for another case, dating back to 1993, in Idaho.

In that case, he pleaded guilty to money laundering.

According to an Associated Press article from that year, McNair and four other men, including a “Rex McNair,” schemed to defraud employer Westinghouse Electric Corp. and the federal government through the sale of 655 remediation kits for the Naval Reactor Facility at the Idaho National Engineering Laboratory.

Energy Services, a Colorado-based oilfield services company, brought Dyad to court over violating the non-compete clause in a 2011 contract for consulting services relating to soil and water reclamation systems. At the time, Jake McNair was the company’s registered agent.

In a civil complaint, Energy Services alleged it spent far more than $500,000 to underwrite Dyad’s development of reclamation technology. DYAD terminated the agreement and stated “it owned no further responsibilities to Energy Services” despite the five-year non-compete clause “for its own pecuniary gain,” according to the complaint.

The case was settled out of court.

And Daniel McNair was most recently indicted on multiple charges in Alaska state court.

According to court documents, McNair and his company, DMC Technologies, were contracted by Anchorage, Alaska-based Little Red Services, an oilfield services company, to clean up a pad contaminated with diesel fuel in 2008. DMC Technologies was to treat contaminated soils under three building footprints and one former excavation area.

By 2010, DMC said it was finished treating, and said it had the lab report to prove it.

It wasn’t until the summer of 2012 that Little Red Services CEO Doug Smith, seeking state acknowledgement that the soil was clean, found the report had been “altered to reflect lower than required cleanup levels,” according to court documents.

“The state did not recognize that the cleanup was complete, which was news to us,” Smith said in an interview.

“In essence, the (Little Red Services) pad remained contaminated,” the state alleged. The report also allegedly contained forged signatures of laboratory employees.

The lab, TestAmerica, told the state in interviews that the data appeared fraudulent.

Daniel McNair faces charges including theft, scheme to defraud and falsifying business records.

With the money paid to DMC and another company that finished the job just in the past month, “I put 1.5 million [dollars] into this thing,” Smith said. “So buyer beware.”

Ironically, Dyad had pictures of the Little Red Services botched cleanup job on its website for its operations here in North Dakota under the new name, Smith said.

“We knew it was the right company because we found pictures of our cleanup operation, our pad, on their website,” he said.

The pictures are no longer on the website.

“The real shame of this is that our motivation to help get to the bottom of this was to make sure that if in fact these guys are doing things incorrectly that it stops,” Smith said, “and there’s not future victims as we feel we have become.”

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