PHILADELPHIA -- Several companies manufactured lead for more than 140
years at a massive factory surrounded by homes in the city's Port
Richmond area: John T. Lewis & Bros., National Lead, Anzon and
others. The factory is long gone, and tests show dangerous levels of
lead in nearby yards - putting children at risk of being poisoned by
playing in the dirt.
Yet if homeowners want their yards to be
made safe, it's up to them - not the companies or the government -- to
pay the costs of replacing contaminated soil or capping it with cement.
That's the message residents say the Environmental Protection Agency
delivered at neighborhood meetings this year.
"That was 100%
clear - that it was on us," said Lisa Conway, who attended two of the
meetings and hopes the new backyard sod the family had installed will
protect their 8-month-old son.
"I think it's kind of shady that
nobody wants to take responsibility for all the years and decades of
irresponsible contamination," said Christina DiPietro-Sokol, who has
covered her backyard in artificial turf to keep the family's children
and their huge dog from coming into contact with the dirt. Estimates to
cement over it were in the thousands of dollars, she said. "We have two
kids in Catholic school. We can't do that."
Making polluters pay
for cleanups is a cornerstone of federal and state environmental laws.
Although many of the companies that operated the old lead factories
highlighted in USA TODAY's ongoing "Ghost Factories" investigation
ceased to exist decades ago, some companies associated with the sites
are still in business today.
Yet some of these companies have
undergone corporate reorganizations or used carefully worded language in
purchase agreements to limit their environmental liabilities. Others
have used bankruptcy to shed financial responsibility for pollution.
And
in some cases, even when companies were intact and could have been held
responsible, government regulators failed to act in time, a USA TODAY
review shows.
The result is that taxpayers or homeowners often
have to bear the cost of cleaning up the contamination -- if it happens
at all. State and federal cleanup programs have limited money to take
care of "orphan" environmental sites that have no private party to pay
the bill. And internal memos show regulators can be reluctant to use
government money to clean up lead in urban soil - even next to old lead
factories - because some of the contamination may also have come from
lead-based paint or cars that once burned leaded gasoline, non-factory
sources the agencies say they don't have the authority or money to
address.
Left undisturbed, lead dust can remain on the surface of
soil for hundreds of years, posing a risk of reduced IQ and other health
problems when children ingest even tiny amounts by putting dusty hands
or toys in their mouths.
Officials at the EPA declined repeated
requests for interviews since October. In a written statement, the EPA
said it can hold companies responsible for cleanups only if it can
demonstrate they have liability under the federal Superfund law, which
provides the agency the authority to address environmental hazards. At
the John T. Lewis factory site in Philadelphia, the EPA said it's still
evaluating options to address soil contamination in the area, including
looking for financially responsible parties.
Proving
responsibility can be difficult when it comes to long-closed factory
sites, and legal experts said companies look for ways to shield
themselves.
The costs can be staggering: Cleaning the yard around one home in
Portland, Ore., will cost up to $90,000, regulators say, and will
involve removing 20 tons of lead- and arsenic-contaminated soil. The EPA
has spent nearly $250 million addressing contamination around more than
10,000 homes near a large lead smelter in Omaha.
"There are
enormous amounts of money at issue in these cases. It's worth fighting
for and it's worth looking for a way to avoid liability on the part of
responsible parties," said environmental attorney Linda Bullen, a former
EPA regional counsel now with a law firm in Las Vegas.
Robert
Glicksman, professor of environmental law at George Washington
University Law School, said: "The trick is distinguishing when they
cross the line from clever manipulation and taking advantage of
loopholes, to situations when they're abusing the process and should be
held responsible for the liability."
In general, successor
companies have no liability for contamination at old factories
previously operated by the companies they acquired. But there are
exceptions, Glicksman said, including if it can be demonstrated that the
purchasing corporation is a mere continuation of the previous
corporation, if there was essentially a de facto merger of the companies
or if the transaction was fraudulent and intended to escape liability.
Proving
those things can require interviewing former employees and gaining
access to company records - which may no longer exist.
"The
reality is, with many of these old sites, it's very difficult to find
records," said John Cruden, who previously oversaw environmental
enforcement for the U.S. Justice Department and now is president of the
Environmental Law Institute in Washington, D.C.
"In truth, there's
a lot of times where there simply is no viable party, that company is
long gone," Cruden said. "But that's why the Superfund exists."
Yet
there's a big problem, he notes: The federal Superfund for
environmental cleanups lost its main funding source in 1995 - taxes on
oil and chemicals, and an environmental tax on corporations, which were
allowed to expire. The result is that the Superfund trust fund's
balance had dropped to $137 million by the start of 2009 from a peak in
1997 of $5 billion (in constant 2009 dollars), according to a 2010
report by the Government Accountability Office. The report noted that
the EPA's estimated costs to clean up existing Superfund sites exceeded
current funding levels from Congress. The EPA said this month that the
current balance of the trust fund is now about $80 million.
So, in
many cases, finding viable companies that bear legal responsibility is
the key to addressing contamination. Doing so can involve unraveling
tangled corporate histories. And sometimes, even when responsible
companies are still in business, regulators fail to act in time.
Shedding liabilities with bankruptcy
In
April, USA TODAY's "Ghost Factories" investigation revealed that the
EPA was given a list in 2001 of more than 460 potentially unrecognized
former sites of lead factories, which primarily operated and shut down
during the 1930s to 1960s. The EPA was warned by the private researcher
who compiled the list from old factory directories that many of them had
likely contaminated the soil of surrounding properties with a toxic
layer of lead fallout.
Despite the warnings, USA TODAY's
examination of sites on the list found that federal and state regulators
had done little to investigate many of them or warn thousands of
families and children in harm's way.
One of those unaddressed sites is in Pittsburgh's Bloomfield neighborhood. The former Federated Metals factory there
processed lead, tin, copper and other metals from 1893 to about 1951.
The factory is gone, but its vandalized guard shack remains.
Although the company that operated the factory for many of its final
years - the giant metals corporation ASARCO - is still in business, it
says it has no responsibility for investigating or cleaning up any
potential toxic fallout on nearby homes and a playground. That's because
ASARCO went through bankruptcy and agreed by December 2009 to pay $1.79
billion in cleanup costs to settle EPA and state environmental claims
at more than 80 sites across the country. The EPA and state regulators
never filed a claim for the Pittsburgh Federated Metals site - even
though four years earlier EPA investigators had written a report about the site warning of contamination risks and the need for further investigation.
ASARCO's
vice president for environmental affairs, Thomas Aldrich, said the
Pittsburgh Federated Metals site was never mentioned during the
bankruptcy proceedings. "Apparently, EPA knew about the site and decided
not to file a claim regarding it," Aldrich said. "Any action would now
be barred by the bankruptcy discharge."
The EPA said that's likely
the case. The agency said it didn't have enough evidence during
ASARCO's bankruptcy that a cleanup was needed at the Pittsburgh
location.
And the EPA still hasn't done the additional assessment
recommended by its contractors in September 2005 to determine whether
the factory "contaminated nearby residential areas." That assessment is
still planned, the EPA said recently, but no date was given.
Pennsylvania environmental regulators haven't evaluated the site,
either, and said they are "awaiting the results of EPA's study."
Meanwhile,
parents like Michelle Mazzotta worry about their children playing in
nearby Osceola Parklet, a popular neighborhood gathering spot that's
within a few hundred feet of the now-vacant Federated Metals site. "It's
kind of sad," she said, after being told about the EPA's 2005 report.
"This is a big community with a lot of children in it."
Pittsburgh city officials were unaware of the potential risks
identified by the EPA until contacted by USA TODAY and will be asking
the state's environmental agency to do soil sampling in the area, city
spokeswoman Joanna Doven said.
Federated Metals' buildings were demolished in 2009, after years of being used to store vehicles for an auto repair business.
The
University of Pittsburgh Medical Center, which cleared the factory
buildings and some nearby parcels, wants to build a parking garage. UPMC
spokeswoman Susan Manko said it would be "inappropriate" for the
hospital to share its private environmental assessments of the property.
"Nothing
in those studies indicated there was an immediate environmental concern
but that UPMC may have to undertake some environmental cleanup prior to
developing the property, which of course we would do," she said.
Taxpayers are now facing the bill for any action needed around the old factory.
"EPA is planning a reassessment of this site to determine appropriate next steps and further actions," the agency said.
Purchasing assets, without liabilities
Bankruptcy is one way companies can shed environmental liabilities.
In
other cases, decades of sales, divisions and mergers have obscured the
corporate lineage of companies that operated old lead factories.
The
former Glidden Co., which dates to the 1900s, once made lead-based
paint and had a Metals Refining division that operated plants across the
country, including sites in Cleveland and Hammond, Ind.,
records show. But the company that today sells paint under the Glidden
name notes that it is not the same company that operated the old lead
factories and said it is not responsible for them. AkzoNobel obtained
the Glidden trademark by buying another company that had previously
purchased only certain parts of still another company that had acquired
the old Glidden Co.
Two other old lead factory sites featured in
USA TODAY's "Ghost Factories" investigation can be traced to Kaydon
Corp., a publicly traded company with headquarters in Ann Arbor, Mich.,
and its Canfield Technologies division.
One of them is the former
Thos. F. Lukens Metal Co., which operated a factory at the corner of
Hedley and Bath streets in Philadelphia's Bridesburg neighborhood. A
company called Lukens Metal became a part of Canfield Technologies about
30 years ago, said Chris Synosky, a longtime Canfield sales manager.
Synosky said factory operations had ceased at the location and Canfield
used the site for several years as a distribution warehouse.
The
former Lukens factory site is across the street from homes where
children live. Tests by USA TODAY have found hazardous levels of lead in
nearby yards. The EPA says it plans to assess the area in 2013.
The second site is the former M.C. Canfield Sons factory site
in Newark, which is now under part of a condominium complex. Tests by
New Jersey regulators - in response to USA TODAY's investigation - have
found high levels of lead in the soil and have asked the EPA to do a
cleanup.
Kaydon vice president and general counsel Debra Crane
said the company has no responsibility at the two factory sites. That's
because Kaydon purchased only certain assets of Canfield Technologies in
2000 - and that purchase did not include the company's historical
environmental liabilities. "We did not assume any liabilities under that
asset purchase agreement," she said.
Crane added: "It's kind of a
stretch, I think, to say the fact that we wanted to use a name that has
recognition for marketing purposes is sufficient to require us to be
liable for operations and manufacturing facilities that we've never
seen, never walked on, never touched and had no connection to."
Records
filed with the Securities and Exchange Commission show Kaydon "acquired
substantially all of the assets" of Canfield. The unpurchased parts of
Canfield Technologies remained behind in a company that was renamed as
DGRM Corp. during the month of the sale. DGRM Corp. stopped filing
annual reports for years after the sale and had its New Jersey
corporation status revoked.
Daniel Grossman, listed as Canfield
Technologies board chairman on the August 2000 name-change document,
declined to be interviewed or to answer questions about what happened to
DGRM Corp. and whether it has any responsibility to investigate and
remediate contamination around the sites in Philadelphia and Newark.
In
an e-mail, Grossman said he'd "never heard of Thos. F. Lukens Metal
Co." and that the "Canfield Technologies owned by me and my partners
certainly never acquired Thos. F. Lukens Metal Co."
Grossman
acknowledged involvement with a Lukens firm with a slightly different
name: Lukens Metal Corp. - Corp. instead of Co., and no first name or
middle initial.
"Lukens Metal Corp. was merely a name-saving
corporation with no assets or operations," Grossman said, noting that
Canfield and later Kaydon marketed a few products under the Lukens
brand.
"Whether 50-70 years ago there was a business relationship
between an earlier Canfield and Thos. F. Lukens Metal Co. I have no way
of knowing," Grossman said. "But even if there were, I do not believe
this would have any legal relation to Canfield Technologies or Kaydon
Corporation."
Pennsylvania corporation records show
that the Lukens Metal Corp. that Grossman and Canfield transferred to
Kaydon listed its address as "Hedley & Bath Streets" in Philadelphia
when it was incorporated in 1984. That's the same location that
historical Sanborn fire insurance maps and other records show was once
the Thos. F. Lukens Metal Co. factory site. The factory on Hedley Street
used a shortened name -- "Lukens Metal Co." -- in advertisements for its solder products in the 1950s.
Canfield
Technologies transferred the newer Lukens Metal Corp. and assigned all
of its capital stock to Kaydon in 2000, according to the asset purchase agreement
Kaydon filed with the Securities and Exchange Commission. Kaydon's CEO
in 2001 signed papers dissolving this Lukens, records filed with
Pennsylvania show.
Grossman didn't respond to questions about both
Lukens companies being listed at the same Hedley Street location.
Crane, Kaydon's attorney, said the two Lukens-named firms were "two
separate companies," and that the Lukens Metal Corp. purchased by Kaydon
never acquired the real estate at Hedley and Bath streets.
Crane
said Kaydon has "absolutely nothing at all in our files about any of the
old Canfield Technologies sites. But we wouldn't because we weren't
interested in them, we didn't want them."
Grossman didn't respond
to questions about the Newark location. New Jersey corporation records
show that M.C. Canfield Sons changed its name to Canfield Technologies
in 1996.
New Jersey environmental regulators investigating the
contaminated Newark condo property also have made some initial
connections between M.C. Canfield Sons and Canfield Technologies and
DGRM Corp. and shared them with the EPA, according to an August 2012 state memo.
The
EPA declined to be interviewed about the sites or the potential
liabilities of the companies. If the agency were to incur cleanup costs,
"EPA would then make a determination about a company's environmental
liabilities," the agency said in a statement.
Frustration in Philadelphia
In Philadelphia, where residents say they are being told to clean up their own yards around the old John T. Lewis-National Lead-Anzon factory site, it may be difficult or perhaps impossible to hold corporations accountable.
Pennsylvania
environmental regulators allowed Anzon, the last company operating the
plant, to enroll in a voluntary state program to clean up just the
factory's property around 1998 - without requiring any investigation of
potential toxic fallout on the surrounding neighborhood. Successful
completion of the program, known as Act 2 or the state's Land Recycling
Program, generally gives companies liability relief, with a few
exceptions, from "ever having to do more cleanup in the future ...
either because the DEP wanted it, or because citizens sued for more
cleanup," according to a Q&A document on the department's website.
Even though homes surrounded the factory, which had operated since
the 1800s, the Pennsylvania Department of Environmental Protection says
no testing was required to determine the extent of contamination beyond
the factory's borders.
"There is no such requirement under Act 2
for sites being remediated for non-residential use. These are voluntary
cleanups conducted to bring former industrial sites back into productive
reuse," the DEP said in a statement.
The factory property was turned into a commercial area with shops and restaurants.
The
DEP declined to be interviewed about whether the state did enough
during the Anzon cleanup to protect the health of nearby residents. The
department said generally that Act 2's "liability protection only
applies to the area that was investigated and remediated." DEP officials
wouldn't discuss whether, as a practical matter, the passage of years
has made it impossible to make Anzon pay for possible future costs. Many
of Anzon's assets were sold to another company years ago, records show.
Sandy Salzman, one of the neighborhood residents who attended EPA
meetings this year, said federal officials weren't optimistic about
getting the factory's operators to pay for any cleanup.
"They
said that would be really difficult because most of them aren't around
anymore," said Salzman, executive director of the New Kensington
Community Development Corp.
And the EPA said it had no federal
funds for testing or cleanup, recalled Maggie O'Brien, president of
Fishtown Action, a neighborhood group that hosted an EPA meeting in
April. "They were basically acting like they weren't under any
obligation to do anything about it other than to tell us," O'Brien said.
"They couldn't or wouldn't do anything."
The EPA is aware of community frustration. An internal agency e-mail recounts
how during a community meeting in March a neighborhood group official
"expressed a strong opinion that EPA should be doing more than just
outreach and education as we really seemed to drop the ball since the
facility closed in 1996."
Anzon was a part of the Cookson Group, a
British company that continues to be a leading global supplier to the
steel and foundry castings industries. Spokespeople for the Cookson
Group didn't respond to repeated requests for interviews or comment.
Officials at NL Industries, the company formerly called National Lead,
also didn't respond to interview requests about their operation of the
plant, which court records say was from 1960 to 1979.
The
factory's operators did emergency cleanups along "nearby streets" in
1988 and 1991 after a plant fire and accident, according to the EPA.
Around the same time, residents sued NL Industries and Anzon claiming
that the plant's operations harmed their families. According to court
records in the class action, Anzon entered into a settlement in the case
before the trial ended. Because NL Industries didn't settle, in 1994
the case went to the jury to decide each company's liability. The jury
found negligence by Anzon, including that it was liable for $2 million
for testing to determine cleanup needs in one of three geographic zones
involved in the case. The jury found no negligence on the part of
National Lead.
The EPA said it assessed the site in 1995, but no
further action was taken "in light of pending sampling and cleanup work
to be conducted " by Anzon as a part of the court settlement. Exactly
what cleanup Anzon did is unclear; Cookson officials wouldn't answer USA
TODAY's questions.
The EPA sent investigators back to the
neighborhood in 2005, after the site was included on the 2001 list of
unrecognized lead-smelter sites. They recommended soil tests, which were done in 2009.
Of the 17 samples from four homes' yards, 14 had elevated lead levels,
most of them well above the EPA's hazard standard for residential soil
where children play.
USA TODAY tested dozens of soil samples from the neighborhood last year and also found dangerous levels of lead in area yards.
Still,
internal EPA documents show that agency staff questioned whether the
lead in the yards came from the massive lead factory, or perhaps from
lead paint or the tailpipes of cars that once burned leaded gasoline.
Urban areas, the agency has said, have many sources of lead, and the EPA
is authorized to address only contamination that can be tied to
factories.
At the John T. Lewis site in Philadelphia: "Continued
assessment of these properties may yield properties with elevated levels
of lead without clear information on the major source contributor,"
Jack Kelly, the EPA official assigned to the site, wrote in a "Hot Issue" memo in May
to the EPA's regional administrator. "The urban lead-in-soil problem
arguably exceeds EPA's Superfund resources making a traditional removal
approach (dig & cover) likely infeasible."
It's unclear how
much of EPA's approach at the site is driven by the Superfund's lack of
money, and how much is driven by public health, science and what the
agency is allowed to do under the law.
John Pendergrass, a senior
attorney at the Environmental Law Institute, says that while the EPA
needs to trace lead to a factory, "they don't need to trace all the
lead" found in the area to one specific source. Pendergrass noted that
it's possible for the EPA to do lead "species" testing that can help the
agency show lead came from the factory. "I would think in this case
there would be evidence they could find to show that it comes from a
smelter that had been there that long," he said.
In a statement,
the EPA said it "has made no decisions regarding the source of lead in
sampled soils, the potential liability of any party, or response actions
to be taken" and that it is still "considering the value" of doing lead
species testing in the neighborhood.
The EPA said it has issued
information requests to companies believed to be successors to the
businesses that operated the facility and has evaluated their responses.
The agency didn't name the companies or provide further details.
"The search for financially viable potentially responsible parties is ongoing," the EPA said.
USA Today