NATURE OF THE CASE: THIS IS THE RESULT OF A HQ-DEVELOPED INVESTIGATION INTO POTENTIAL FIFRA VIOLATIONS BY THE FIRST BIOTECHNOLOGY COMPANY TO APPLY FOR A FIFRA EXPERIMENTAL USE PERMIT (EUP) FOR EXPERIMENTAL ENVIRONMENTAL RELEASE OF A GENETICALLY-ALTERED ORGANISM. EPA CHARGED AGS WITH VIOLA- TING THE EXPERIMENTAL USEPERMIT CONDITIONS AND FALSIFYING INFORMATION IN THE PERMIT APPLICATION. AGS CONDUCTED AN OUTDOOR EXPERIMENT WITH ITS GENETICALLY-ENGINEERED MICROBE FROSTBAN IN VIOLATION OF EPA FIFRA BIOTECHNOLOGY POLICY AND FAILED TO ADEQUATELY REPORT THE EXPERIMENT IN ITS EUP APPLICATION. / ISSUES OF NATIONAL IMPORTANCE: THIS IS THE FIRST CASE EVER FILED BY EPA FOR VIOLATIONS INVOLVING GENETICALLY-ALTERED ORGANISMS. THE CASE WILL TEST THE STRENGTH OF EPA'S FIFRA BIOTECHNOLOGY POLICY AND ITS ABILITY TO ENFORCE VIOLATIONS UNDER FIFRA/ 12(A)(2)(H) AND 12(A)(2)(M). / RECOMMENDED ACTION: AGS PLANS TO FILE AN ANSWER DENYING THE ALLEGATIONS IN THE COMPLAINT AND THEN NEGOTIATE. BECAUSE AGS IS FILING AN ANSWER, EPA MUST BEGIN PREPARING FOR POS- SIBLE TRIAL. REGION-IX, NEIC, AND OPP WITNESSES WILL BE BRIEFED AND THE TAPED INTERVIEW WITH POTENTIAL WITNESS DENNIS BROSTIN TRANSCRIBED. DRAFT SETTLEMENT STRATEGY CALLS