Woodwind Lakes subdivision built on oil and gas field turns on neighbor who pointed out the contamination

Nickell added: "I think they were behind schedule...and that they had urgent need for the development of these lots due to some commitments to the builders."

Bojes, the RRC toxicologist, admitted in a deposition years later that testing done in most of the "areas of concern" during the 1990s was inadequate, adding that "if I got the site today, I would have recommended" a full investigation to determine the nature and extent of contamination.

Instead, on August 15, 1995, the RRC officially closed its file on Woodwind Lakes, giving Trendmaker Homes and David Weekley Homes the go-ahead to complete the subdivision.

Shell says the homebuilders were "fully informed" of the site's history and the environmental investigations during the mid-1990s. Representatives for homebuilders were often present at the excavation sites, Nickell said in his deposition.

Brendan Cook, attorney for Trendmaker, downplays just how much the company actually knew. "There was some minimal level of knowledge," he says, "[though] certainly not what has come to be revealed."

But neither the developer nor the homebuilders provided any disclosures to the vast majority of potential homebuyers plunking down as much as $300,000 to live in Woodwind Lakes.

There were a few exceptions, such as Paul Anderson, who signed releases with minimal disclosures regarding the site's history. But this was done only after oil wells or petroleum pipelines were discovered on their specific lots. "Trendmaker," Anderson says, "knew the oil and gas operations were much more extensive than what I was agreeing to."

Anderson now believes the release he signed was meant to muzzle him, thereby inducing him to commit fraud against his unsuspecting neighbors. He cannot reveal the specific terms of his agreement with Trendmaker, only that he forfeited his right to sue. But that did not stifle his activism:

"I would tell my neighbors, 'Look, I screwed up, but let me tell you what's on your yard.'"

Paul Anderson didn't just tell his neighbors. He called for criminal investigations, filing formal complaints with the Harris County District Attorney's Office, the Texas Attorney General's Office, the Texas Real Estate Commission, the U.S. Department of the Treasury and the Office of Federal Housing Enterprise Oversight.

Anderson alleged "the collusion of public officials and state agencies to fraudulently cover up the prior history of this area from residents."

But nothing ever came of his complaints.

When the RRC reopened its file on Woodwind Lakes in 2001 -- five years after closing it -- many of the same officials remained in charge. Unlike the federal EPA, the RRC has no ombudsman to ensure interagency accountability.

"The bad guys are investigating themselves," Anderson says.

The oldest regulatory agency in Texas, the Railroad Commission was established in 1891 to oversee the rail industry. Today it regulates the state's oil and gas industry, gas utilities, pipeline safety and surface mining of coal and uranium.

Widely viewed as an industry lapdog, the RRC even lacks the authority to require investigations by oil and gas companies at sites where contamination has likely occurred. It can only make requests.

Just 6 percent of the RRC's $62 million annual operating budget is used to assess sites and conduct cleanup activities such as the ones ongoing at Woodwind Lakes. More than one-third -- and in some cases as much as one-half -- of the money collected by the RRC's publicly elected commissioners comes from industries they regulate, according to Texans for Public Justice, an Austin-based nonpartisan, nonprofit organization that tracks corporate spending in state politics.

Due to budgetary constraints, the RRC depends on oil and gas companies to conduct environmental testing. "We review the data they send us," RRC toxicologist Bojes said in her deposition, adding that the agency has no way of knowing if tests are skewed or otherwise inaccurate.

Further fueling suspicions, the RRC claims its early files on Woodwind Lakes "were purged of data that did not seem appropriate to long term storage" and "could have been discarded," according to a letter dated January 26, 1998 from Guy Grossman, RRC district director of the oil and gas division for the Houston area.

Two of the environmental companies hired by Shell to investigate Woodwind Lakes in the mid-1990s also claimed years later that their files had been lost or purged.

On July 8, 2002, Shell sent a nine-page letter to the RRC summarizing the investigations conducted at Woodwind Lakes a decade earlier. Shell blasted Warren Petroleum, which is now a subsidiary of ChevronTexaco, for declining to help investigate and clean up the site unless Shell released it from any liability. Shell refused, so ChevronTexaco never returned after initially removing a pair of 1,200-foot-long pipelines.