PORTLAND, Ore. (AP) – In a rare prison sentence for an environmental crime, the owner of a company that repeatedly mishandled waste oil and other hazardous material has been sentenced to six months in a federal penitentiary.

Donald Spencer will also pay a maximum $150,000 fine on behalf of his former company, Spencer Environmental Inc.

In a separate case, a former Spencer Environmental plant manager was indicted Wednesday by a federal grand jury on charges of obstructing justice and giving a false statement in the death of a Spencer employee.

Spencer was convicted of failing to dispose properly of thousands of gallons of used oil, much of it dumped into a large open pit in southeast Portland.

His company was also convicted of illegal treatment and disposal of wastewater contaminated with highly corrosive hydrofluoric acid.

Assistant U.S. Attorney Dwight Holton said the mishandled waste was the source of a catastrophic fire and was implicated in the case of a worker who “died a horrible death – with his lungs gradually disintegrating.”

Holton told U.S. District Judge Ancer Haggerty a prison term for Spencer was necessary because “it is imperative that a message be sent loud and clear – we can’t let environmental crimes such as this be treated as the cost of doing business.”

Haggerty agreed the company shared some of the blame for the death of Tim Smith, a college student who died from lung damage in July 2003 about three weeks after he tried to clean a tank for an industrial customer of Spencer Environmental.

Because a Spencer Environmental manager ordered the tank filled with other material after Smith was hospitalized with breathing problems, prosecutors said it was impossible to prove any connection.

But the judge told Spencer during sentencing on Thursday there was “no question” that if his company had properly tested the tank for contamination Smith would not have been ordered to clean it.

“I realize that you or your company were not charged with the injury that resulted in death,” Haggerty said, “but the government’s argument for a penitentiary sentence has merit.”

Prison terms are rare in environmental cases. Only two previous cases in the past decade in the Pacific Northwest resulted in prison sentences, both in Idaho, according to U.S. Justice Department records.

Haggerty rejected arguments by Spencer’s attorney, Per Ramfjord, for home detention and probation instead of prison.

Ramfjord said the company was not “deliberately or knowingly” disposing of waste illegally and noted the March 2004 fire that destroyed the open pit disposal site resulted from a welder’s torch nearly a year after Spencer sold the business he had founded in the 1970s.

In a brief statement to the judge, Spencer apologized and said, “I recognize I made some mistakes.”

Holton, however, noted in a presentencing memo that “Spencer could have prevented many of the problems that were associated with his facility in his role as president of the corporation, but failed to do so in order to cut costs and cut corners.”

The fire led to the federal investigation resulting in the charges.

Holton called Spencer’s violations of environmental laws “repeated and egregious” with “tragic consequences.”

In the indictment handed up Wednesday against former Spencer Environmental plant manager Durbin Hartel, prosecutors said that after Smith was hospitalized, the tank where he had been cleaning was filled with sludge called “rocker lube.”

Holton said that “rather than sampling the tank or preserving the remaining contents, Hartel ordered the tank filled … the very next business day, destroying forever any evidence.”

Smith’s uncle, Greg Smith, said doctors might have been able to save his nephew if they had known what kind of chemical he had inhaled.

Smith, who attended the Thursday sentencing for Spencer, said his nephew was also learning to be a pilot to follow in the missionary work of his parents in Africa, where he grew up.

“He was a great kid,” Greg Smith said. “It’s a tragedy all the way around.”