Tuesday, February 08, 2005

W.R. Grace Execs Indicted For Asbestos Coverup

George Bush's Frivolous Asbestos Claims?

In yet another case of deadly corporate coverups, the W.R. Grace & Co. and seven of its current or former executives and department heads were indicted yesterday in federal court in Missoula, Montana.

According to the Environmental Protection Agency,
W.R. Grace and its executives, as far back as the 1970’s, attempted to hide the fact that toxic asbestos was present in vermiculite products at the company’s Libby, Montana plant. The grand jury charged the defendants with conspiring to conceal information about the hazardous nature of the company’s asbestos contaminated vermiculite products, obstructing the government’s clean-up efforts, and wire fraud. To date, according to the indictment, approximately 1,200 residents of Libby have been identified as suffering from some kind of asbestos-related abnormality.


The indictment alleges that the defendants, beginning in the late 1970's, obtained knowledge of the toxic nature of tremolite asbestos in its vermiculite through internal epidemiological, medical and toxicological studies, as well as through product testing. The indictment further alleges that, despite legal requirements under the Toxic Substances Control Act to turn over to EPA the information they possessed, W.R. Grace and its officials failed to do so on numerous occasions. In addition to concealing information from EPA, the indictment alleges that W.R. Grace and its officials also obstructed the National Institute of Occupational Safety and Health (NIOSH) when it attempted to study the health conditions at the Libby mine in the 1980's.

The indictment further alleges that, despite their knowledge gained from internal studies, W.R. Grace and its officials distributed asbestos-contaminated vermiculite and permitted it to be distributed throughout the Libby community. This occurred in numerous ways, including, allowing workers to leave the mine site covered in asbestos dust, allowing residents to take waste vermiculite for use in their gardens and distributing vermiculite "tailings" to the Libby schools for use as foundations for running tracks and an outdoor ice skating rink. After W.R. Grace closed the Libby mine in 1990, it sold asbestos contaminated properties to local buyers without disclosing the nature or extent of the contamination. One of the contaminated properties was used as a residence and commercial nursery.
St. Louis Post Dispatch investigative reporter Andrew Schneider broke the original story in 1999. In an interview yesterday on National Public Radio Schneider recalled that over 1000 people in Libby -- workers, spouses and children -- show signs of asbestos disease and the EPA has found that more than 250 already died so far.

According to Schneider, thousands of documents belonging to Grace revealed that the mills released over 5,000 lbs of asbestos fibers into the air over Libby every day the plant operated. Although the mine closed in 1993, asbestos-tainted vermiculte remains in the houses, gardens and driveways of Libby.

The worst part is that the documents also show that Grace knew when they took over the mine in 1960 that the vermiculite ore was tainted with asbestos and that asbestos exposure was deadly. Grace concealed this knowledge from the town and from the workers in Grace's 200 plants across the country. The biggest problem, however -- which EPA hasn't even begun to deal with -- is that asbestos-tainted vermiculite insulation remains in the attics of 35 million homes around the country.

The documents are chilling:
Those documents show years of extensive communication between Grace's top managers and health, marketing and legal directors and mine officials in Libby about concealing the danger from asbestos in the vermiculite ore and in the finished consumer products. They discussed methods to keep federal investigators from studying the health of the miners, the potential harm to Grace sales if asbestos warnings were placed on the products made from the vermiculite and the effort to mask the hazard of working with the contaminated ore.
Grace didn't even enter bankruptcy honestly:
Grace, which produces construction chemicals, building material and packaging, filed for Chapter 11 bankruptcy protection in 2001 because of the "sharply increasing number of asbestos claims," Paul Norris, Grace's chairman and CEO, said at the time.

In May 2002, the Justice Department intervened in Grace's bankruptcy, the first time it had entered this type of case. The federal charges alleged that before Grace filed for Chapter 11, it concealed money in new companies it bought. Justice Department lawyers said Grace's action was the "fraudulent transfer" of money to another of its companies to protect itself from civil suits.

"Grace allegedly removed billions of dollars of assets against which parties who were injured or damaged by Grace's asbestos-containing material had claims," the Justice Department told the court.
Unlike OSHA citations, violations of EPA's laws carry stiff penalties:
In addition to the company and [Alan] Stringer [manager of the now-closed mine], those named in the indictment are Henry Eschenbach, former health official for a Grace subsidiary; Jack Wolter, a former executive for Grace's construction products division; William McCaig, former general manager of the Libby mine; Robert Bettacchi, a senior vice president of Grace; O. Mario Favorito, chief legal counsel for Grace; and Robert Walsh, former Grace vice president.

The company could face a fine of up to $280 million, twice the amount of after-tax profits the government alleges W.R. Grace realized from the Libby mine, according to the Justice Department

Stringer could be sentenced to as many as 70 years in prison, while Wolter and Bettacchi face maximum prison terms of 55 years. The other defendants could get 5 years in prison.
This isn't the first time that W.R. Grace poisoned a community. In a case made famous in the book, A Civil Action, Grace paid $8 million to eight Woburn, Massachusetts families to settle their civil suits after children died of leukemia from drinking well water contaminated by a WR Grace factory.

The sad case of Libby, Montana marks only the latest low-point for corporate deception in this country. After the previous asbestos scandals and huge lawsuits (or frivolous cases, according to our President), after the tragic cover-ups by the lead and vinyl chloride industries (See Markowitz and Rosner's Deceit and Denial for the lead and Vinyl Chloride stories), one can only wonder what other hazards American companies have hidden -- and continue to hide -- from workers and communities.

And despite these crimes, the President of the United States and corporate America continue their attack on the regulatory agencies that are supposed to protect workers and communities, while at the same time mounting a campaign to weaken citizens' right to sue corporate criminals like Grace.

One hopes that corporate America will finally learn a lesson from these indictments, although nothing can make up for the human damage that Grace has caused:
Les Skramstad, a Libby resident and former mine worker who was diagnosed with asbestosis nine years ago, said he was pleased criminal charges had finally been filed.

"This wasn't something that happened to us. This was something that was done to us," said Skramstad, who attended Monday's news conference.

Skramstad, 68, said he worked in the mine for 2 1/2 years and believes he not only contracted asbestosis there, but brought home asbestos fibers that also sickened his wife and two children.

All of them now have asbestosis, Skramstad said.

"They should have to pay," Skramstad said of the defendants. "They will never have to pay like we did, because it won't cost them their lives."