From: Maurice Possley, Chicago Tribune
Published February 9, 2005 12:00 AM

Chemical Company, Officials Indicted on Asbestos-Related Charges

Feb. 8--MISSOULA, Mont. -- A federal grand jury here indicted W.R. Grace & Co. and seven current and former company officials Monday on charges of conspiring to hide from employees, their families and the public that ore mined near Libby, Mont., was contaminated with a toxic form of asbestos.

The asbestos has been blamed for more than 200 deaths of miners and members of their families. In announcing the indictment, U.S. Atty. Bill Mercer said 1,200 people associated with the mine or Libby have been diagnosed as suffering "some kind of asbestos-related abnormality."

Many of those diagnosed never worked in the mine, but instead lived in Libby, a town of less than 3,000 in the northwest corner of Montana.

Lorie Hanson, special agent in charge of the criminal division in Denver of the Environmental Protection Agency, said the indictment was one of the most important ever brought by the agency.

A company statement denied the charges and said, "As a company and as individuals we believe one serious illness or lost life is one too many. That is why we have taken so seriously our commitment to our Libby employees and the people of Libby."

Beginning in 1923, hundreds of thousands of tons of vermiculite -- used as attic insulation, fireproofing and as additive to potting soil and fertilizer -- were excavated from Zonolite Mountain just outside of Libby.

The product was shipped to virtually every state in the country and was used to insulate tens of thousands of homes. Grace earned $140 million in after tax profits on the mine and if convicted, could face a fine double that amount.

Grace, a chemical and building materials firm, purchased the mine in 1963 and closed it in 1990, citing sagging sales and lawsuits alleging the mine was responsible for people who were diagnosed with asbestosis. Monday's indictment alleges that company officials were aware of the health hazards of asbestos, but did little beyond attempting to cover it up.

The Seattle Post-Intelligencer exposed the deaths and contamination in 1999, prompting the federal government to move in to attempt to clean it up. The town was declared a federal Superfund site designating it for a cleanup and in 2003, a federal judge ordered Grace to pay $54 million for the cleanup.

During the years the mine was in operation, vermiculite and other products from the milling process were put on Libby gardens, yards, and used to provide a foundation for a running track at a junior high school and for an elementary school skating rink.

Grace officials named in the indictment included senior vice presidents Robert Walsh and Robert Bettacchi; Alan Stringer, former mine manager; Henry Eschenbach, former director of health, safety and technology; Jack Wolter, former vice president of mining and engineering; William McCaig, former manager of mine operations; and O. Mario Favorito, Grace chief group counsel. All face prison terms if convicted.

As late as 2002, Grace denied there was a problem, stating in a letter to the EPA, which was then seeking to declare the town of Libby a public health emergency, that the vermiculite "poses no risk to human health or the environment," according to the indictment.

The company and its officials knew of the dangers as early as 30 years ago, through scientific testing and analysis, including animal studies, epidemiological studies of employees and other internal investigations, but concealed the findings and stymied attempts by others to investigate, the indictment charged.

In 1979, Dr. Richard Irons, a local physician in Libby, wrote a letter to Grace, "expressing concern about the health of Libby Mine workers and their families and the health effects of take-home dust," and proposed conducting a health study, the indictment said.

Eschenbach wrote to Grace management, including Wolter, that "Irons is turning the screw ... We either play the game his way or he is going to blow the whistle."

Grace sought bankruptcy protection in 2001, citing numerous asbestos-related lawsuits. Last year, a consultant's report to Montana officials estimated the medical costs for asbestos exposure in Libby will exceed $32 million over the next five years.

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