'A Civil Action' II
W.R. Grace & Co. became an ugly symbol of the polluting corporation thanks to its role in "A Civil Action," the book and movie about water contamination and its devastating human cost in Woburn years ago.
As grim as the Woburn story became, it may not match another tale of pollution in the course of commerce, serious illness, and death. Once again, Grace is at the center of the action.
Grace's mining operation in Libby, Mont., dug out vermiculite and covered the area with tremolite asbestos dust in the process. During the years Grace operated the mine hundreds of people may have died from lung cancer, asbestosis, and other related diseases, according to exhaustive research published by the Seattle Post-Intelligencer five years ago.
"An entire town was poisoned with asbestos for decades by W.R. Grace, a company that lied to its workers and the community about the deadly dust to which it was exposing its workers, their families, and the citizens of Libby," says US Senator Max Baucus, Democrat of Montana. Civil suits from Libby could fill a courthouse. A federal court ordered Grace to pay $54.5 million for cleanup costs under the Superfund law.
Now this: Grace is expected to be indicted soon on criminal charges based on its role in Libby. The company has warned it expects to be indicted early this year. The timing, in fact, could be very soon.
Settlements are always possible in legal cases. But Grace says it's the target of a criminal grand jury investigating "possible obstruction of federal agency proceedings, violation of federal environmental laws, and conspiring with others to violate federal environmental laws." Good luck settling that with a town known for its sick and dying people in the background.
Grace also says several current and former senior-level employees connected to its construction-products business have also been named as targets of the grand jury.
Libby is hardly Grace's only asbestos problem. In fact, it has been hit with many thousands of personal injury lawsuits during a wave of asbestos litigation and filed for Chapter 11 bankruptcy protection in 2001 as a result. Asbestos lawsuits have sent more than 70 companies to US Bankruptcy Court.
US Senate Judiciary Committee chairman Arlen Specter, Republican of Pennsylvania, is expected to introduce a bill next week to create a $140 billion fund for victims of asbestos exposure and to put an end to related lawsuits. Previous asbestos fund proposals have failed because companies, insurers, and labor unions could not agree how much money was enough to pay all claims.
Baucus had been able to carve out special considerations for Libby residents in earlier asbestos trust fund bills. He's hoping they'll get the same treatment in Specter's proposal.
An asbestos fund may help Grace finally get out of bankruptcy court, but it won't extract the company from its trouble in Libby.
Two decades ago, Grace paid $8 million to eight Woburn families to settle their civil suits over poisoned wells and leukemia. A lesser known fact: Grace was later indicted for lying to the Environmental Protection Agency but had the good sense to bargain down the charges and settle for $10,000. Grace will have a hard time striking that kind of deal again.
The Red Herring
The trustee for creditors of the failed Bank of New England has settled his case against bank auditor Ernst & Young for $84 million in midtrial. Trustee Ben Branch says he will present the deal for US Bankruptcy Court approval Feb. 9. Some investors holding junior Bank of New England bonds were disappointed by the settlement amount. Branch had sought $220 million plus interest, which could have brought the total to more than $500 million.
Steven Syre is a Globe columnist. He can be reached at syre@globe.com.
