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W.R. Grace, 7 execs indicted

By Bob Anez

Associated Press

MISSOULA, Mont. -- A federal indictment charges that W.R. Grace and Co. and seven of its executives knew a mine was releasing cancer-causing asbestos into the air and tried to hide the danger from workers and townspeople.

A newspaper study linked nearly 200 deaths to asbestos from the vermiculite mine in the small town of Libby, about 130 miles northwest of Missoula near the Canadian border. More than 1,200 became ill over the 30 years that Grace, a global supplier of chemicals and building materials, operated the mine.

The federal grand jury handing down the indictment said top Grace executives and managers kept secret numerous studies spelling out the risk the asbestos posed to its customers, employees and Libby residents.

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According to the indictment, Grace -- knowing the risks -- provided vermiculite for a junior high school running track and as a base for an ice rink, and sold or leased some of its contaminated properties for homes and businesses, baseball fields, even city use.

The indictment, unsealed Monday, also accused Grace and Alan Stringer, former manager of the now-closed mine, of trying to obstruct efforts by the Environmental Protection Agency to investigate the extent of the asbestos contamination beginning in 1999, when a study by the Seattle Post-Intelligencer linked the nearly 200 deaths and hundreds of illnesses to the mine.

The newspaper's study was based on interviews with doctors in several states.

The EPA, which has never disputed the findings of the study, has since declared the area a Superfund site and has spent more than $55 million on cleanup so far.

"A human and environmental tragedy has occurred in Libby. This prosecution seeks to hold Grace and some of its executives responsible for the misconduct alleged in this indictment," said Bill Mercer, the U.S. attorney for Montana.

Columbia, Md.-based Grace said in a statement it "categorically denies any criminal wrongdoing."

"We are surprised by the government's methods and disappointed by its determination to bring these allegations," the company said. "And though court rules prohibit us from commenting on the merits of the government's charges, we look forward to setting the record straight in a court of law."

Also named in the indictment were Henry Eschenbach, former health official for a Grace subsidiary; Jack Wolter, a former executive for Grace's construction products division; William McCaig, former general manager of the Libby mine; Robert Bettacchi, a senior vice president of Grace; O. Mario Favorito, chief legal counsel for Grace; and Robert Walsh, former Grace vice president.

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The company could face a fine of up to $280 million, twice the amount of after-tax profits the government alleges W.R. Grace made from the mine, according to the Justice Department. Grace filed for bankruptcy protection in April 2001 after it was overwhelmed by asbestos-related lawsuits.

Stringer could be sentenced to as many as 70 years in prison, while Wolter and Bettacchi each face up to 55 years. The other defendants could get five years.

"This wasn't something that happened to us. This was something that was done to us," said Les Skramstad, 68, a former miner who was diagnosed with the chronic lung disease asbestosis nine years ago.

Skramstad, who attended Monday's news conference, said he worked in the mine for 2 1/2 years and believes he brought asbestos fibers home with him. His wife and two children also suffer from asbestosis.

"They should have to pay," Skramstad said of the defendants. "They will never have to pay like we did, because it won't cost them their lives."

Grace bought the mining operation, which once supplied more than 80 percent of the world's vermiculite, in 1963 and shut it down in 1990. According to the indictment, the company knew of lung problems among its employees as early as 1976.

Grace executives also had access to reports or studies warning of the dangers of asbestos vermiculite exposure throughout the late 1970s and early '80s, the indictment alleged. Yet Grace officials told the EPA in 1983 they knew of nothing to indicate their products posed a substantial threat to human health, according to the indictment.

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