W.R. Grace to Pay Feds $250 Million for Montana Asbestos Work

W.R. Grace & Co. agreed to reimburse the federal government $250 million for the investigation and cleanup of asbestos contamination blamed for sickening hundreds of people, some fatally, in the northwestern Montana town of Libby.

Approval of a federal bankruptcy judge is necessary to cement the agreement by the U.S. Justice Department, which said $250 million is a record sum for reimbursement through the government’s Superfund environmental cleanup program.

Taxpayers have been footing the bill for the U.S. Environmental Protection Agency’s investigative and cleanup work in Libby, where the agency arrived in 1999. Expenses total $168 million and another $175 million in costs are likely, said Paul Peronard, EPA’s Libby project leader.

Sen. Max Baucus, a Montana Democrat, called $250 million “a drop in the bucket compared to the destruction and pain our neighbors in Libby have been through.”

Asbestos came from the vermiculite mine and processing facilities, a few miles from Libby, that Grace owned and operated from 1963 until the site’s closure in 1990. Vermiculite was used in a variety of products and the asbestos was dispersed in a variety of ways.

Workers carried it home on their clothing. Asbestos also ended up in the yards of homes where vermiculite was spread as a soil conditioner. Exposure in Libby has been blamed for lung-scarring asbestosis and for mesothelioma, a fast-moving cancer that attacks the lungs.

“Cleaning up the mess and taking care of the Montanans poisoned by W.R. Grace will take years of hard work,” Sen. Jon Tester, a Montana Democrat, said in a statement. “It will also require responsibility from a company that knowingly turned so many Montana families into victims.”

In a statement issued through spokesman Greg Euston, Grace said it was pleased with the agreement. Euston said Grace, which is in Chapter 11 bankruptcy proceedings because of lawsuits over asbestos, had no other comment. The industrial-supply company is based in Columbia, Maryland.

The agreement would settle a government claim to recover expenses for past and future costs of asbestos cleanup in Libby homes, businesses and schools.

More than 215 asbestos-related deaths in Libby have been confirmed and a clinic in the community, the Center for Asbestos-Related Disease, is following about 2,000 asbestos cases, said Jon Heberling, a Kalispell lawyer with clients pursuing legal action for asbestos exposure.

“‘Any judgment against Grace is a good one,” Gayla Benefield of Libby said Tuesday. “This is a step forward; $250 million is nothing to sneeze at considering that in 1999 they (Grace) were saying, ‘We didn’t cause the problem. We didn’t do anything.”‘

Benefield has said she suffers health effects from asbestos exposure and lost both parents to asbestos-related diseases.

The EPA’s Peronard said the remaining cleanup work in Libby is likely to take three to five years.

In 2001, the government filed a lawsuit to recover costs and in 2003, the EPA won a $54 million judgment for cleanup costs incurred through Dec. 31, 2001. However, the money went unpaid during Grace’s bankruptcy protection. The settlement announced includes that 2003 judgment, the Department of Justice said.

Besides removing soil around homes and businesses, cleanup has included removing building insulation and debris containing asbestos. Peronard said cleanups have been completed at 954 properties, and 450 remain on a cleanup list. Still to be decided: what to do about some 700 properties that are in the Libby area and are contaminated but do not meet removal criteria.

Meanwhile, Grace has until April 14 to file a petition with the U.S. Supreme Court, asking for review of a 9th U.S. Circuit Court of Appeals decision about evidence in a trial. A 2005 indictment charged Grace and seven of its former managers with conspiring to hide health risks associated with the Libby mine. Grace has denied any criminal wrongdoing. One of the indicted managers, Alan Stringer, died of cancer last year. His wife, Donna, said the death was not related to asbestos.