Grace says it faces federal jury probe

Asbestos-related illnesses in Montana investigated

October 30, 2004|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

W.R. Grace & Co., the Columbia-based chemical company, said yesterday that it is being investigated by a federal grand jury in connection with asbestos contamination in a small Montana town where it once operated.

The investigation involves possible obstruction of federal agency proceedings, violations of federal environmental laws and conspiring with others to violate environmental laws, the company said in a press release.

Several former and current high-level Grace employees have also been targeted, the company said.

Grace declined to comment beyond the press release. The U.S. attorney in Montana could not be reached for comment.

The company said it was not told any details of possible illegal actions, but officials believe the investigation is related to its former facility near Libby, in the northwest corner of Montana.

Grace ran what was the world's largest vermiculite mining and processing operation near Libby from 1963 until it closed in 1990.

Vermiculite is used in insulation and releases asbestos, which the government has said was spread through the town. The mine has been linked to numerous incidents of lung cancer and asbestosis found in mine workers and town residents.

Since the mine closed, Grace said, it has spent millions of dollars cleaning up Libby.

The company filed for bankruptcy protection in April 2001 because of asbestos-related claims against it. There were 120,000 pending lawsuits against the company at that time, including dozens from Libby residents.

For the past decade, the Libby site has been owned by a Montana-based timber company.

Superfund site

A federal judge has ruled that Grace owes the Environmental Protection Agency $54.5 million for cleaning up Libby; the company has disputed $21 million of the costs and appealed the decision. The EPA declared the town a Superfund site.

Gayla Benefield, a community activist in Libby who has lost several family members to asbestos-related diseases and suffers from one herself, said it was rumored in the town that a criminal investigation was under way.

"It's been a continual battle to try to get Grace to have done the right thing," Benefield said. "A lot of us have discussed over the years and asked, `Why hasn't anyone pressed criminal charges?'"

Divided sentiment

While there are still residents in town who defend Grace, a company that lent strong economic support to the community for years, others have felt all along that Grace wronged them, Benefield said. There are 1,500 cases of asbestos-related diseases in Libby, which has about 9,000 residents in the town and its surrounding area, she said.

Benefield said a criminal investigation would bring closure to many residents of Libby.

"I think the whole thing will lend credibility to what we're trying to do," she said, "and what we're trying to do is get our town cleaned up."

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