A government-owned company that runs electronics recycling plants at federal prisons from New Jersey to California is coming under intensified scrutiny for repeatedly exposing prison employees and inmate laborers to excessive levels of lead and other toxic metals.

The Justice Department’s Office of Inspector General is expected within days to release its report on a years-long investigation of the recycling operations — including accusations that prison officials ignored basic workplace safety precautions.

Separately, the U.S. Bureau of Prisons has quietly paid about $1 million to settle a grievance over hazardous duty pay for employees of an Elkton, Ohio, prison with one of the recycling plants. On one occasion, an air test at the eastern Ohio institution found cadmium levels 450 times higher than federal safety limits.

And a union for employees at the federal lockup in the central California community of Atwater also is demanding retroactive hazardous duty pay. Barring a settlement, that case is scheduled for arbitration in December.

On another front, lawyers preparing health claims for employees of the prison at Marianna, Fla., last week sued the Bureau of Prisons, claiming it has illegally withheld records about the recycling operation there, including by blaming a loss of documents on Hurricane Ivan.

“They’re trying to keep a very tight lid on this for as long as they can,” said Katherine Viker, one of the lawyers. “This is embarrassing for them.’’ Bureau officials declined comment.

At issue is the conduct of Federal Prison Industries, a for-profit, government-owned corporation established in the 1930s to provide constructive activity and job skills to inmates. The company, which goes by the trade name Unicor, employs thousands of inmates in a variety of businesses, including recycling factories at eight institutions: Ft. Dix, N.J., Leavenworth, Kan., Lewisburg, Pa., Marianna, Fla., Texarkana, Texas, and Tucson, Ariz., in addition to Elkton and Atwater. In 2009, the recycling business employed 860 inmates earning from 23 cents to $1.15 an hour, according to Unicor’s annual report. Sales from recycling operations last year were about $9.2 million.

It could not immediately be determined if any claims have been filed on behalf of inmates.

The settlement with Elkton employees was reached last October, according to people who described it to FairWarning. Union officials would not provide a copy, saying the agreement is sealed. The Bureau of Prisons would not confirm the settlement, discuss the pending case at Atwater, or say if similar negotiations are underway at other institutions with recycling plants.

“It would be inappropriate to comment in regards to allegations about this program that may have been raised by recent litigation and/or union grievances,’’ the bureau said in a statement to FairWarning. “These matters are pending and/or confidential.”

The recycling plants take in computers and TVs, sorting out those that can be refurbished or sold. The rest are dismantled to salvage electronic components, metals and glass. Until recently, some of the plants routinely smashed thousands of cathode ray tubes from computer monitors and TVs — a potential source of hazardous dust because the tubes contain cadmium and up to several pounds of lead.

Lead exposure can cause a range of health effects, including harm to the kidneys, cardiovascular and nervous systems. Cadmium can also cause kidney and neurological damage and is a human carcinogen. According to documents and interviews, some of the recycling plants operated for years without adequate ventilation and dust controls, protective gear or hygiene measures — such as change rooms to keep workers from wearing contaminated clothing to their homes or cells.

“They didn’t put the safeguards in place to do it the right way,” said Bill Meek, an Elkton employee and vice president of local 607 of the American Federation of Government Employees, which represents Elkton workers.

In recent years, the bureau has taken steps to upgrade safety. It has spent about $800,000 for decontamination work at Elkton, where the recycling plant remains idle since closing down for the cleanup in 2008.

Officials say that in May they halted glass-breaking — the smashing of cathode ray tubes. The move was prompted by financial rather than safety considerations, they said.

“We are confident that our current recycling operations are safe,” Bureau of Prisons spokeswoman Traci Billingsley said in a written statement.

Though some employees say they have suffered serious illnesses, it’s uncertain if any recycling-related ailment has ever been confirmed by medical diagnosis.  After visits to four of the sites, investigators from the National Institute for Occupational Safety and Health reported last December that they had “documented no health problems that could be linked to recycling work .”

However, illnesses from toxic exposures sometimes take years to develop, experts say. And according to a string of government reports, it is impossible to know the extent of staff and inmate exposures at some of the sites because records for the early years are sketchy or non-existent.

“The program was developed…into a prison industry ‘on the fly’ without any research into potential hazards, health or safety matters, training or discussions of hazardous waste handling,” according to an affidavit by Joe McNeal, a former employee who in 1994 helped set up the first of the recycling plants at Marianna.

The first stirrings of trouble came when Leroy Smith, a safety officer at Atwater, questioned whether adequate safeguards would be in place at a new recycling plant there. Several institutions, including Marianna, Elkton and Texarkana, already had recycling factories. Smith wanted his superiors to order a hazard assessment before opening the Atwater plant, but as later noted in a Bureau of Prisons report he was rebuffed.

Atwater began recycling in April, 2002. Records show that from June through November, a series of air tests found lead and cadmium above limits set by the Occupational Safety and Health Administration. An air test the following February revealed excessive levels of beryllium, a toxic metal used in computers.

“It was a trial and error” operation, recalled Phil Rodriguez, a former Atwater safety officer now working for the Bureau of Prisons in Washington state. Along with ‘’metal and dust and everything flying in the air,” Rodriguez told FairWarning he saw inmates getting “massive cuts’’ from breaking cathode ray tubes without goggles or face shields.

For his part, Smith filed a whistleblower complaint in 2004, saying his recommendations had fallen on deaf ears and that he had suffered harassment and intimidation for trying to protect inmates and staff.  His complaint was settled with his transfer from Atwater to the federal prison in Tucson.

In 2006, he was honored with the annual “Public Servant Award” of the U.S. Office of Special Counsel, an independent investigative agency that examines whistleblower cases.

By then, the dispute had taken on a life of its own. The Office of Inspector General had opened its investigation, enlisting NIOSH and the Federal Occupational Health Service to review records and assess conditions at several recycling sites.

“Electronics recycling at…Texarkana appears to have been performed from late 2001 until May 2004 without appropriate engineering controls, respiratory protection, medical surveillance, or industrial hygiene monitoring,” said one of the reports. Therefore, “we cannot determine the extent of exposure to lead and cadmium that occurred during that time.”

The picture that emerged of Elkton was more damning.

There, too, recycling had been done from 1997 until May 2003 without proper safeguards or air monitoring, NIOSH said.

However, air tests in May 2003 revealed cadmium above permissible levels. In 2005,Unicor launched a program to recover computer chips without taking steps to control the temperature of lead solder. “Staff described a visible haze…and expressed concern about exposure to lead fume from this operation,’’ NIOSH said. “Descriptions of work tasks from staff…indicate that exposure to lead during this process did occur.’’

Also in 2005, OSHA inspectors took air samples and cited the plant for serious violations of the cadmium standard.

Chris Carusso, a former Elkton employee, told FairWarning that supervisors usually knew when inspectors were coming in, and ordered staff to shut down operations and do a thorough cleaning.

“When I first started, I used to do it and then I kind of got hip to what was going on,” Carusso said. “I’d tell the inmates, ‘Don’t do anything special.’ ”

In February, 2007, during a monthly cleaning of ventilation filters in a glass-breaking area, NIOSH investigators found that cadmium levels were 450 times, and lead levels 50 times, above OSHA limits. The reason, according to their report, was that instead of using a wet process to hold down dust, workers cleaned the filters by “vacuuming, shaking, or banging on the floor to shake dust out.”

The Elkton settlement does not involve claims of health damage but the narrow issue of hazardous duty pay. Federal regulations provide for a wage boost of up to 25 percent for government employees whose work involves unusual hardship or environmental danger. The union filed a grievance, saying the NIOSH findings showed that Elkton staff were entitled to hazard pay for time spent working in and around the recycling complex.

The agreement covers back pay for the years 2002 to 2008, and provides a maximum of about $50,000 to a few workers with the highest potential exposures.

Lea Yu of FairWarning also contributed to this article.