Superfund Reform, or Corporate Welfare?
Air Date: Week of November 17, 1995
While many large polluters are being held accountable for widespread toxic dumping, some small businesses with minor violations are getting caught up in the same legal and financial complexities of Superfund laws. Patrick Cox of member station WBUR in Boston reports on a small Massachusetts firm that's inherited some big business and legal problems.
NUNLEY: This is Living on Earth. I'm Jan Nunley, in this week for Steve Curwood. Perhaps no environmental legislation has been a better example of the law of unintended consequences than Superfund. Designed to force polluters to pay for their misdeeds, Superfund has generated more lawsuits than clean-ups. And many businesses have found themselves liable for others' mistakes. Congress wants a radical restructuring of Superfund, but critics say those reforms will just let big corporate polluters off the hook and force taxpayers to pick up the cleaning tab instead. More from Patrick Cox of member station WBUR in Boston.
(A clock chimes.)
COX: The Chelsea Clock Company in Chelsea, Massachusetts, boasts a history dating back 99 years. The White House and the US Navy are customers; so are several members of the Grateful Dead.
(The sound of tools)
COX: Workers assemble the clocks by hand here. It's the only such operation in the nation.
COX: The Chelsea Clock Company may be in trouble. A few years ago, owner Rick Leavitt tried to get a bank loan so the company could expand. A bank ordered inspection revealed groundwater contamination on the premises. Leavitt, who has owned the company since 1978, launched an investigation.
LEAVITT: There was one individual, a machine operator, who was responsible for disposing of his oily cleaning solvent in a disposal drum at the company the previous owners had arranged to have for him outside in a shed. Occasionally, he told me, once, perhaps twice a year, he would get lazy and dump a half pail of it down the storm drain that is located outside of our factory.
COX: When they discovered the contamination the bank refused to loan Leavitt any money, afraid they could be liable for the cost of a clean-up. What's more, the bank is trying to sever its links with Leavitt as quickly as possible by demanding he repay his mortgage at an accelerated rate. The Chelsea Clock Company is not a Superfund site. It's not under an order to clean anything up. But a clean-up might be ordered some day, and the mere threat of a clean-up means under current law, a company and any lenders would be liable for the cost. Even though the spills took place before Leavitt owned the company. Leavitt says that's rendered his business worthless. He can't get a loan to expand, and he can't sell the company.
LEAVITT: I own the property. I own the business. I did not pollute. And yet I am responsible for a clean-up the cost of which far exceeds the ability of this business to pay for.
COX: Leavitt is not alone in feeling he's sinking under the weight of the Federal Superfund law and its state counterparts. Many businesses along with their insurance companies are calling on Congress to dramatically reduce their clean-up liability.
OXLEY: This is a badly-flawed piece of legislation that we've been working with now for 15 years. It's a bad law and it needs radical change.
COX: Republican Congressman Michael Oxley of Ohio is leading the reform charge. The Superfund law imposes taxes and fines on corporations with the intention of making polluters pay for toxic clean-up. But it hasn't always turned out that way. For one thing, Superfund is putting perhaps innocent business owners like Rick Leavitt of the Chelsea Clock Company in a bind. But maybe more important, most polluted sites aren't getting cleaned up. In fact, clean-up is being completed on fewer than 10% of Superfund sites. Typically, clean-ups are delayed for years as firms sue their insurance agencies and each other over liability. The problem for many lies in the fact that much of the chemical dumping took place prior to 1980 when it was perfectly legal. In 1980, the Superfund law retroactively made that dumping illegal and the companies liable. Congressman Oxley wants to relieve some of the pressure on these companies by making them pay just half the cost of clean-up.
OXLEY: We're saying that we're going to give you a rebate for cleaning up because we don't think you were liable in the first place.
COX: But the House proposal does more than that. It would give the rebate to all polluter companies, including those who have dumped illegally since 1980. House Republicans also want to eliminate the liability of some small businesses and banks who loan to potentially liable firms like the Chelsea Clock Company. Critics say these reforms would chop $700 million off the money available for clean-ups, and either taxpayers would have to make up the difference or a site wouldn't get cleaned up. Karen Florini of the Environmental Defense Fund says it's tantamount to corporate welfare.
FLORINI: The House bill would turn Superfund into a pay the polluter program by providing that from now on, every time a polluter spends a dollar cleaning up EPA has to write the polluter a check for 50 cents. If the House bill goes through in anything like its current form, what we're going to have is inadequate funds and crummy clean-up.
COX: The Environmental Defense Fund is backing an alternative set of reforms proposed by the EPA. Those reforms focus on how the Agency deals with small businesses.
DeVILLERS: We need to treat people fairly. I think at times perhaps we haven't.
COX: John DeVillers is the EPA's New England administrator. Under the Agency's new rules, more small businesses would escape full liability from clean-up costs and have easier access to bank loans. Officials hope to reduce litigation and frustration among owners of companies who may not be responsible for the pollution they're asked to clean up. The EPA's DeVillers says the overall goal is to forge alliances, not create enemies.
DeVILLERS: When the first contact that a small businessman has with the Environmental Protection Agency and the Superfund program is to get a letter that in essence says congratulations, you may be subject to a $25,000 a day fine and criminal penalties, including jail time, for your involvement in a site, that's -- that's rather more frightening than it is enlightening.
COX: Critics say the EPA's internal reforms are just a half-hearted attempt to stave off more sweeping changes. Nonetheless, the EPA and the Clinton Administration say they are willing to compromise with Republicans. The Administration has indicated it would support a narrowing of Superfund's focus, even removing some of the most contentious sites from the Superfund list such as municipal landfills. But Administration officials say Superfund's cornerstone principle, that the polluter pays for clean-up, must remain. And despite the law's unintended effects,they say, Superfund can work.
THIBIDEAU: I lived in Dartmouth all my life. I've moved 100 yards from where I was born.
COX: High school teacher Arthur Thibideau has an intimate knowledge of the EPA, after serving 12 years as chairman of a citizens advisory committee for the resolved Superfund site in Dartmouth, Massachusetts, 70 miles south of Boston. The EPA has overseen a $23 million clean-up of the site, a former chemical waste dump. Thibodeau is impressed with how the EPA handled the clean-up.
THIBIDEAU: The EPA came up with a system. The responsible parties were responsible to the system and worked together. And I think they did the job the best that they could have done.
COX: To get this 6-acre site cleaned, the EPA cut a deal with most of the 400 businesses that had deposited hazardous chemicals here. The businesses agreed to pay for most of the clean-up costs after they were given some control over the project. Litigation was reduced and the clean-up is now entering its final phase.
(A dog barks)
COX: More than 300 people live within a quarter mile of the former dump. Site manager Joe LeMay says the clean-up is essential to their health.
LeMAY: We're removing the threat of groundwater migrating offsite and potentially contaminating some of these residents.
COX: LeMay points out wetlands on the site that are slowly returning to their natural state. Notices still prohibit consumption of the eels and catfish in ponds nearby. But LeMay says eventually, people will be able to eat these fish.
LeMAY: Over time, by cleaning up this area, the PCB levels in the fish had come down dramatically so that they are actually an edible fish again.
COX: This site might not have been returned to health under the Republicans' proposed reforms. That's because the reforms would require the EPA to prove its chosen clean-up plan was the most cost effective, and that such a plan would bring back what's described as significant ecosystems. At a time when Congress is slashing the EPA's overall budget, critics of the reforms say it would be a tough case for the EPA to make. They say liable businesses would be less inclined to strike a deal with the EPA as they did in Dartmouth. The result: even more litigation and even less clean-up than now. President Clinton has vowed to veto the Republican reforms, but the Administration is in a weak position. Congressional leaders are threatening to hold up reauthorization of the corporate taxes that partially pay for Superfund until the President lifts his veto threat. One way or the other, it seems, the reach of Superfund in combating toxic dumping is set to shrink. For Living on Earth, I'm Patrick Cox in Boston.
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