"A human and environmental tragedy has occurred in Libby," U.S. attorney for the District of Montana Bill Mercer said Monday from the front steps of the Missoula County Courthouse. "This prosecution seeks to hold Grace and some of its executives responsible for the misconduct alleged in the indictment."
Libby residents welcomed the announcement.
The corporation W.R. Grace along with senior vice president Robert J. Bettacchi and present and former employees Alan R. Stringer, Henry A. Eschenbach, Jack W. Wolter, William J. McCaig, O. Mario Favorito and Robert C. Walsh each have been charged with one count of conspiracy, three Clean Air Act violations of knowing endangerment, two counts of wire fraud and four counts of obstruction of justice.
Stringer is a former manager of the now-closed mine, as is McCaig. Eschenbach is a former health officer of a W.R. Grace subsidiary, Favorito is the company's chief legal counsel, and Walsh is Grace's former vice president.
Asbestos contamination in Libby was brought to the nation's attention in 1999 after newspaper reports linked the vermiculite mine's pollution with the deaths of nearly 200 people and illness in hundreds more. The EPA has since declared the Libby area a Superfund cleanup site.
The vermiculite mined in Libby was used in a number of household products, including home insulation and potting soil. With the vermiculite, though, came a deadly airborne byproduct - tremolite asbestos.
The indictment charges that W.R. Grace executives knew the mine operations caused the airborne release of asbestos - and understood that they were placing mine workers, family members of mine workers and those living in surrounding Lincoln County communities in imminent danger of death or serious bodily injury.
The indictment further claims that W.R. Grace officials conspired to defraud the EPA and the U.S. Department of Health and Human Services by withholding information and delaying government investigators.
"It was a purpose of the conspiracy to increase profits and avoid liability by misleading the government and preventing the government from using its authorities to protect against risks to human health and the environment," the indictment states.
Further, the indictment says the company knowingly sold and leased contaminated real estate and withheld that information from the purchasers, allowed contaminated property to be used for a Little League baseball field and gave contaminated material to the Libby community - specifically for use on the high school and junior high school tracks and for an elementary school ice rink.
"The defendants falsely described, concealed from and failed to reveal to the government the hazardous nature and friability of the tremolite asbestos in the Libby vermiculite and the health hazards associated with exposure to tremolite asbestos," the indictment states.
A statement released by W.R. Grace a few hours after the charges were announced said, "Grace categorically denies any criminal wrongdoing." It did not elaborate on any of the specific allegations.
If convicted, the corporation's executives could face up to five years in prison for each conspiracy and obstruction of justice charge and up to 15 years for each endangerment charge.
Stringer, the former mine manager, could be sentenced to 70 years in prison. Wolter and Bettacchi could serve 55 years and the other defendants could get five years' jail time.
W.R. Grace, which has filed for bankruptcy, could face fines of up to twice the gain associated with its alleged activities or twice the losses suffered by victims.
According to the indictment, W.R. Grace enjoyed at least $140 million in after-tax profits from its mining operations in Libby. As of Dec. 31, 2001, the EPA had incurred $55 million in cleanup costs at the Libby site.
Lori Hanson, special agent in charge of the EPA's regional office of criminal investigation in Denver, said the W.R. Grace case is one of the most significant indictments in the history of the agency.
According to the indictment, and the EPA's investigation, the company knew of lung problems among its mine workers as early as 1976. Grace executives also received reports warning of the dangers of asbestos vermiculite exposure in 1977, 1980, 1981 and 1982.
At one point, according to the indictment, former Grace health officer Eschenbach responded to a cautionary study by writing in a memo: "Our major problem is death from respiratory cancer. This is no surprise."
Despite the studies and on-site health problems, Grace executives told EPA investigators that they had no indication of any substantial threat to human health posed by their products or the mine operations.
And when the EPA arrived in Libby in 1999, company officials lied about providing vermiculite insulation to local residents for their homes and businesses, according to the indictment. The denials continued as late as April 2002, when the EPA declared a public health emergency in Libby.
Reporter Colin McDonald can be reached at 523-5259 or at cmcdonald@missoulian.com
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