Indiana manipulated report on Amazon worker’s death to lure HQ2, investigation says

Will Evans | Reveal from The Center for Investigative Reporting

Show Caption Hide Caption Timeline of events: Amazon and Indiana A former Indiana OSHA official says his investigation into Amazon was thwarted by officials, including Gov. Holcomb, who wanted to lure Amazon’s HQ2.

Corrections and Clarifications: Reveal for The Center for Investigative Reporting has updated the circumstances surrounding Indiana safety inspector John Stallone’s departure from his job. The details became a matter of public dispute on Nov. 29, when Indiana Gov. Eric Holcomb’s general counsel issued cease-and-desist letters to Reveal and the Indianapolis Star.

Stallone maintains that he resigned his job after being told that he was going to be terminated for job performance issues. Personnel records released by Indiana list his departure as a termination for failing to “successfully complete probationary period.”

Legal counsel for Reveal and IndyStar have sent separate responses to the governor’s cease and desist letters.

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Editor's note: This story was produced by Reveal from The Center for Investigative Reporting, a nonprofit news organization. Get their investigations emailed to you directly by signing up at revealnews.org/newsletter.

When an Amazon worker was killed by a forklift in a Plainfield warehouse in 2017, the state of Indiana’s investigator found the company was at fault. The state cited Amazon for four major safety violations and fined it $28,000.

But an investigation by Reveal from The Center for Investigative Reporting has found that, as Gov. Eric Holcomb sought to lure Amazon’s HQ2 to Indiana, state labor officials quietly absolved Amazon of responsibility. After Amazon appealed, they deleted every fine that had been levied and accepted the company’s argument — that the Amazon worker was to blame.

The investigator on the case, John Stallone, had arrived at the warehouse a day after 59-year-old Phillip Lee Terry was crushed to death. He was so troubled by the pushback he was getting from higher-ups that he secretly recorded his boss, Indiana OSHA Director Julie Alexander, as she counseled the company on how to lessen the fine.

“It’s like being at a card table and having a dealer teach you how to count cards,” Stallone said.

He said pressure to back off came from as high up as the governor’s mansion.

The governor’s office and Indiana labor officials declined interviews. In statements, they both called Stallone’s account false.

Read the governor's response: Holcomb disputes interference allegations in Reveal story

It began in September 2017, when Amazon announced a search for a second headquarters, saying it would invest more than $5 billion and bring as many as 50,000 jobs to whichever city won the sweepstakes.

Holcomb got the news while on a trip to Japan. He returned home on a Friday night and spent the weekend in deliberations on the bid. On Monday, he announced his state would join the bidding war. He put the Indiana Economic Development Corporation in charge of putting together a package of local and state incentives.

“We are doing what Amazon has asked us to do: coordinating efforts with all interested regions of the state to put our best bid forward,” he said in the statement.

Read the full investigation: Amazon delivery comes at a cost for workers

He had tough competition. Arlington, Virginia, offered $550 million in cash and a helipad. Atlanta dreamed up an exclusive airport lounge with free parking for Amazon executives. Maryland’s Montgomery County dangled $6.5 billion in tax incentives.

The efforts of Indiana state officials to vie for Amazon’s interest were about to intersect with Terry’s life.

The tragedy

Terry had been at Amazon for about two years. He started as a picker in a Plainfield fulfillment center, then moved to the maintenance department. He had a background in an unrelated field – marketing – but quickly took on the task of handling complicated industrial equipment.

Terry made a surprisingly strong impact on his co-workers, even at a big, busy warehouse. He’d chat them up and make them laugh whenever he could, said Jennie Miller, who worked picking orders with Terry.

“There’s only kind of a few people that you ever meet in your life that have those kinds of sparkling personalities,” she said.

On Sept. 24, just a few days after he’d been eating ice cream and watching college football with his grandkids, Terry showed up for work and was sent to do maintenance on a forklift. He walked under the machine’s forks and metal platform to work on it with a wrench. Suddenly, the 1,200-pound piece of equipment dropped down and crushed him.

His body lay there nearly two hours before a co-worker noticed the pool of blood.

The next day, Stallone, a safety inspector with the Indiana Occupational Safety and Health Administration, headed to Amazon to investigate.

The investigation

Safety was the family business for Stallone. His father had worked his way up to become director of enforcement for the Alaska state branch of OSHA. Years ago, when Stallone joined the U.S. Air Force and served in Afghanistan, his father told him that wherever his career took him, to always get involved in safety work. And so he did, volunteering on safety committees in the military, then working in industrial safety in oil and gas fields. On a shelf near his front door, he keeps a collection of hard hats from his safety work around the globe.

As he surveyed the site of the accident, Stallone quickly figured out the problem: A tall pole, lying just feet away, should have been used to prop up the forklift during maintenance. In a recording he made of his inspection, Stallone asked an Amazon manager whether there was any written documentation of Terry being trained on that.

“No, sir,” the supervisor says on the recording. He told Stallone that Terry had been informally trained by a co-worker.

Stallone interviewed a co-worker of Terry’s, who put the blame on Amazon’s safety culture coming in second to production demands.

“The safety issues I’ve brought up have been dismissed and not dealt with,” the worker said in a signed statement. “I want to see the safety culture in Amazon change and ensure the maintenance workers have the appropriate amount of training. There’s no training, there’s no safety, it’s ‘Get ’er done.’ ”

Stallone repeatedly pressed Amazon to provide records showing Terry had been trained on that piece of equipment. In the end, he found that Amazon failed to provide adequate training, exposing Terry to a fatal hazard.

Pressure mounts

Indiana OSHA issued four serious safety citations, for a total fine of $28,000. Stallone sought more, but he was getting pushback. On Nov. 20, 2017, Stallone joined his boss, Julie Alexander, the Indiana OSHA director, as she called Amazon officials. He secretly recorded the conversation, which is legal in Indiana, and shared the recording with Reveal.

During the call, Alexander told the Amazon officials what she’d need from them in order to shift the blame from the company to “employee misconduct,” according to the recording.

And she walked them through how to negotiate down the fines. “We sometimes like to consider grouping citations to lower the penalty amounts,” she said.

She suggested Amazon could partner with her agency as a “leader in safety” to kick off a program promoting best practices in the logistics industry.

After hanging up with Amazon, Alexander said: “They’re wanting to probably take this offer and go back and look and say, ‘Hey, we’re partnering with Indiana. We’re going to be the leader.’ ”

She told Stallone, “I hope you don’t take it personally if we have to manipulate your citations.”

Amazon had said it would appeal the citations and had further information that it would share in confidential settlement negotiations. Alexander wondered what it could be. Then she speculated out loud that the information might be about Terry himself, saying, “I’m guessing the guy was probably on drugs or something.”

By this point, a coroner had found nothing in his blood except nicotine and caffeine.

Stallone said he was disgusted. But the pressure to placate Amazon didn’t stop there.

A meeting with Gov. Holcomb

Some days after the conference call with Amazon officials, Stallone said Indiana Labor Commissioner Rick Ruble pulled him into his office. The governor was there, too, standing by the commissioner’s desk, according to Stallone.

He recalled that Holcomb told him how much it would mean to Indiana if the state won the Amazon headquarters deal. Then, Stallone said, the commissioner told him to back off on the Amazon case — or resign.

Stallone said he quit soon afterward. Stallone said he resigned after being told by his supervisors that he was going to be terminated for job performance issues, and maintains to Reveal that those issues were baseless and in retribution for his stance on the Amazon investigation. Personnel records subsequently released by the state of Indiana say Stallone’s employment was terminated for failing to “successfully complete probationary period.”

On Dec. 6, 2017, Stallone sounded the alarm to a federal OSHA official. In an email he shared with Reveal, Stallone told the federal official that “someone higher than Director Alexander” wanted the Amazon case to go away “in the hopes it would keep Indianapolis in the running for their new HQ location.”

The governor’s office denied the meeting with Stallone and the labor commissioner took place, with press secretary Rachel Hoffmeyer writing, “The Governor never gets involved in Department of Labor cases.”

The same day Stallone sent his whistleblower email, Amazon’s corporate offices in Seattle gave a $1,000 campaign contribution to Indiana’s governor. It was years before Holcomb would next face reelection, and Amazon hasn’t donated to him before or since.

A year after Terry’s death, Indiana officials quietly signed an agreement with Amazon to delete all the safety citations and fines. The agreement said Amazon had met the requirements of an “unpreventable employee misconduct defense.” The official record now essentially blames Terry for his own death.

At that point, Indianapolis was one of 20 finalists for the Amazon headquarters deal. Three and a half weeks after the citations were deleted, Amazon held a small-business roundtable event in Indianapolis. Holcomb was there, sitting next to a company representative.

“Our tax and regulatory climates are very — not just attractive, but enticing,” he told a local TV reporter at the event. “And we want to grow together.”

Ultimately, Indiana didn’t win the big sweepstakes, as Amazon chose Arlington for its second headquarters. Federal OSHA declined to investigate Stallone’s complaint.

‘Absolutely false’

The Indiana Labor Department, which oversees the state OSHA, responded to questions about Stallone’s account of the meeting and Alexander’s statements by email, writing that, “The allegations are nothing short of bizarre and fantastical – in addition to being absolutely false.”

In a later statement, the department said it couldn’t prove Amazon should have known Terry wouldn’t properly prop up the forklift. Labor Department spokesperson Stephanie McFarland said Amazon produced proof that Terry was properly trained, including a video of Terry handling the equipment the right way another time. But the agency did not provide any documentation of Amazon’s evidence or any records that would corroborate the department’s account.

Help Reveal's investigation: Share your Amazon warehouse injury records

Two former Amazon safety managers, who spoke with Reveal on condition of anonymity, fearing retaliation, were aware of Terry’s death at the time and faulted Amazon for failing to use formally trained maintenance professionals. One of them, a former senior safety manager, said Amazon had a systemic problem, vividly recalling a report from another warehouse in which a maintenance worker also had failed to properly brace a forklift while working on it, months after Terry’s death.

“If there was any misconduct there, it’s putting a person that has little to no experience and working on this piece of equipment,” said the other former safety manager, who has worked at multiple facilities. “Whoever allowed that to happen – that’s the misconduct.”

Ashley Robinson, a spokesperson for Amazon, would not comment on the circumstances surrounding Terry’s death, citing privacy concerns.

Stallone was so troubled by the incident that he attended Terry’s funeral.

“Someone died on the job because they don’t have a good safety culture,” Stallone said. “I think Amazon was given a pass, and they were able to walk away from this fatality incident with no blood on them.”

More than two years later, Terry’s son, Zach, still thinks about his dad each day.

“I have a lot of anger built up because of everything that’s happened,” he said. “He wasn’t an accident. He was the patriarch of our family.”

Will Evans can be reached at wevans@revealnews.org. Follow him on Twitter: @willCIR.