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News and Commentary on Workplace Health & Safety, Labor and Politics

Monday, January 10, 2005


Asbestos "Compensation" -- Return of the Living Dead

The Corporate Lobbyist-in-Chief President was in the headlines the other day whining about how unfair it is for American businesses (who only want to provide jobs for workers)to be forced to pay billions of dollars and face bankruptcy to pay off lawsuits by victims of asbestos exposure -- of course neglecting to mention the fact that the reason we are in this mess is that the predecessors of the Halliburtons who today face massive liability hid the hazards of asbestos from worker for decades.

I haven't written much lately about the asbestos compensation battle. Maybe I haven't written about it because I'm bored, or just disgusted. Not bored with the pain and suffering that's killed hundreds of thousands, just bored and disgusted with the the same old battle between corporations trying to save a few bucks off the backs of the workers they've sentenced to a painful deaths versus the unions & attorneys attempting to salvage some dignity and meaningful compensation for workers who have only a short life and painful death to look forward to.

The whole discussion is almost surrealistic. Compensation implies that you are attempting to make good on past injuries -- as if what's done is done, and now we just have to make the best of it.

And then I read that last week a federal judge sentenced Alex Salvagno, 38, to to 25 years in prison, and his father, Raul, 71, to 19 years for their roles in directing a massive asbestos cleanup scam. The judge also ordered them
to pay more than $23 million into a fund to compensate businesses, institutions and homeowners that face additional and costly cleanups.

Also, Alex Salvagno will have to pay the federal government $2.03 million and Raul Salvagno $1.71 million in money laundering fines.

The Salvagnos were found guilty in May of racketeering and conspiracy to violate environmental laws for rushing asbestos abatement jobs at 1,555 buildings, most of them in the Capital Region.

***

Witnesses testified that Alex Salvagno's company, AAR Contractor of Latham, profited by forcing its workers to clean up asbestos as quickly as possible, by using illegal methods that jeopardized the health of employees and, in many cases, left deadly fibers behind. Their shoddy work went undetected because Salvagno secretly co-owned a firm, Analytical Laboratories of Albany, which was supposed to be testing the job sites.The prosecution argued successfully that AAR's practices had jeopardized the health of workers who were ordered to rip out the insulating material from ceilings, boiler rooms and around pipes without first wetting it, as law required.

That sent clouds of the dangerous material floating into the air. In addition, workers testified they were discouraged from wearing respiratory equipment by Raul Salvagno, who supervised AAR's work crews.

Dr. Stephen Levin, an associate professor at Mount Sinai School of Medicine, testified in October that an estimated 100 employees who worked for more than four years for AAR will almost certainly get sick and die.
The same prosecutor, Craig Benedict, who won this case also won a 14 year jail sentence against another contractor in 2003 for illegaly removing asbestos in 1100 buildings. The troubling thing is that the Syracuse-Albany area is not an area that has a high amount of asbestos abatement activity; it just has a prosecutor who is good at finding and winning these cases. Imagine what' going on in the rest of the country where no one is looking.

Asbestos related disease will continue to be a major problem in this country for decades. The Environmental Working Group Action Fund released a report last year that found that over 100,000 people will die of asbestos-related disease over the next decade. And those are from exposures that occurred ten, twenty or thirty years ago.

But despite the tragedy of asbestos and obvious guilt of the companies involved, there is general agreement that the current court-focused liability system isn't working very well for victims or the companies. The problem is how to fix it. The two sides, the insurance companies and companies with asbestos liabilities on one side, and the labor unions and trial lawyers on the other -- reached a basic agreement last year on one basic issue -- that there should be a trust fund which would provide compensation to those current sick, as well as to workers who will become sick. It often takes up to 30 years for asbestos exposure to cause cancer.

The main sticking point was how big the fund needed to be. And it's not an easy calculation. The AFL-CIO and trial lawyers have been trying to figure out how many workers are sick today, how many have been exposed, how many of them will become sick, and how much it will cost to compensate them. They figured last year that a $149 billion fund would be needed. The other guys estimated that tens of billions less would be needed. The Republican bill, needless to say, supported the lower fund, but without the support of Democrats and labor, there weren't enough votes in the Senate to pass a bill.

Now even that agreement seems to be falling apart. Moderate Republican Arlen Specter (PA) has taken over the Judiciary Committee from Orin Hatch and is holding a hearing about the issue on Tuesday. Exxon Mobil Corp., E.I. du Pont de Nemours and Co., and other corporations have now announced that they will oppose legislation contemplated by Specter (R-PA) because they fear that his trust fund will be too close to what labor wants.

AFL-CIO President John Sweeney condemned their decision:
Recent statements from a number of prominent business leaders withdrawing their support for creation of a victims’ trust fund represent a serious setback for those who suffer from asbestos disease and for the companies that truly want a fair solution to the crisis. Apparently these business leaders read the results of the November election as license to ignore the plight of asbestos victims and the responsible efforts of a number of other companies to join in the creation of a national trust fund to guarantee asbestos victims fair compensation for their tragic circumstances.
Other sticky issues from previous years' debates include whether or not coverage applies to worker who "just" have asbestosis, as opposed to cancer, what the criteria will be for claiming compensation, and the fate of family member who were exposed when their spouse came home covered with asbestos dust.

While it's hard to say what this year's bill will eventually look like, under a bill introduced last year by Senator Orin Hatch, eleven companies that are negotiating some of the largest potential asbestos-exposure payouts to victims would have saved over $15 billion. One of those companies was Vice President Cheney's old employer Halliburton, which bought Dresser Industries along with its asbestos liabilities. (Last week a district judge approved an order that will settle asbestos lawsuits against Halliburton.)

The bottom line is what we are dealing with here is payback -- President Bush paying back "them that brought him to the dance" by going on the offensive for "fair" asbestos compensation, as part of his campaign for tort "reform" (but that's a story for another day.) What's different this year? Apparently Bush is no longer embarassed to be championing a cause that could help his VP's old company. Then we have is corporate buddies, as John Sweeney says, apparently hoping to cash in their election IOU's to use Bush's alleged "mandate" and the few extra seats in the Senate to try to muscle through some kind of legislation that will save them even more money than Arlen Specter's compensation trust fund would -- legislation that will, once again, screw workers that have already been screwed in ways for which they can never truly be compensated.

And finally, if the recent convictions in upstate New York are any indication, we aren't even close to seeing the bottom of the barrel of asbestos-related disease in this country.



(More on asbestos comp on Laborblog and Dispatch from the Trenches.)

(Update on January 10, 2005 Congressional hearing here.)

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