A Dirty Shame

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"And make sure to underline the 'liability' part," advises Shaun Sullivan. He should know: An assistant city attorney for Denver, Sullivan was assigned in 1990 to unravel the legal tangle at the Lowry Landfill.

Purchased at a fire-sale price from the federal government in 1963, the 64,000-acre former bombing range was pressed into service by the City of Denver as a municipal landfill. A decade later it also became the main local disposal site for thousands of tons of industrial waste generated by companies such as Coors, Hewlett-Packard and IBM.

Beginning in the mid-1970s, however, Congress passed a new, stricter set of rules directing how landfills should be run. And soon after, studies at Lowry detected waste leaching into the local groundwater supply. In 1983 the landfill was declared a Superfund site. The big question: Who would pay the estimated $4.5 billion it would cost to clean it up?

Mostly Denver, the EPA determined. Although the city had run the facility correctly and legally according to the laws of the time, Denver was the owner of Lowry and so had to pay up to half the cost of cleaning it up, the agency contended. After several lawsuits, the city eventually agreed to cover about 20 percent of the bill.

Sullivan estimates that when the books are closed, Denver's final tab for Lowry will come to between $300 million and $400 million, even though the city did nothing close to illegal. "The fact that the EPA can come back [and demand cleanup costs]," he says, "creates in people the sense that something's wrong with the system."

Denver isn't alone in getting snagged by environmental laws that come back and bite years later. Other Colorado cities have written big checks to dispose of their toxic waste and then forgotten about it, only to receive certified letters years later informing them that there is unfinished business to pay for.

But the mess spilling from the PCB, Inc. case is different. For one thing, the amount of time that has elapsed between the initial job and the new bill is unusually long; Colorado towns sent their PCBs to the Kansas City company as many as fifteen years ago. In addition, the number of entities being warned of their liability for the site is huge: approximately 1,800 nationwide, 25 of which are in Colorado. And while some of the parties are large--US West and Colorado State University may get hit by big bills--the majority are small municipalities and electric power co-ops that will be forced to pass the five-figure tabs on to their short lists of citizens and customers.

The biggest difference between PCB, Inc. and other cases, however, is that there is plenty of documentation to suggest that, next to the company and its officers, the party mostly to blame for the toxic ground that Colorado towns are being asked to launder is the EPA itself.

For fifty years, beginning in 1929, approximately 1.5 billion tons of the synthetic chemical compounds known as PCBs were manufactured in this country, mostly by the Monsanto Corp. Because of their stability and heat resistance, the vast majority of PCBs were used in electric transformers and capacitors, although some of the chemicals could be found in epoxy paints, machine lubricants and dyes.

In the late 1960s, though, studies started to indicate that PCBs were toxic to humans. In 1968, nearly 1,300 residents of Yusho, Japan, were inadvertently exposed to PCBs; many of them later developed cancer at a rate higher than the general population, and in 1972 Japan banned PCB production within its borders.

Later studies showed that the very same characteristics that made PCBs valuable in industrial electrical uses--their structural stability--posed a long-term threat to humans through the environment. The chemicals accumulated in plants and animals, which in turn provided a channel to humans.

As a result of the growing alarm over PCBs, Congress began regulating the manufacture of the chemicals in 1976; three years later their production in the U.S. was banned. By then, however, the tap had been left running for a long time. The EPA estimated that about 750 million pounds of PCBs were still in use, and that another 20 million pounds of them sat in storage awaiting disposal.

To scientists and public health officials, those numbers presented a serious health threat. (More recent studies have questioned the danger of PCBs; however, they still are considered hazardous chemicals.) Yet to entrepreneurs, the huge supply of chemicals scattered throughout the country presented an almost limitless opportunity: Somebody had to dispose of them--generally using chemicals or through incineration--and somebody would get paid for it.

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Eric Dexheimer
Contact: Eric Dexheimer