Longform

A Dirty Shame

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Unfortunately, some of these entrepreneurs came from the same stock of businessmen who'd once been drawn to trash-hauling enterprises, and the early days of PCB disposal were ugly. The greatest collection of dubious PCB disposal firms seemed to spring up in the Kansas City area, which, because of the ease of receiving disposal permits there, became known as the "PCB Capital of the World."

It didn't take long for the title to become a curse.

Walter Carolan formed Martha C. Rose Chemicals in 1982 and operated a sprawling facility in Holden, Missouri--until July 1986, when Carolan's company suddenly declared itself bankrupt and walked away from 13.5 million pounds of contaminated equipment left sitting in the middle of the city. Although Rose Chemicals had collected millions of dollars in disposal fees, it left a mere $2,000 behind to clean up the site.

Almost more startling than the mess Rose Chemicals left behind, though, was how the company managed to operate on the far side of the law with minimal, if any, interference from the EPA--the very government agency charged with regulating PCB disposal. In the four years the company was operational, the EPA inspected it four times and assessed $206,000 in fines but managed to collect only $50,000.

Testimony at congressional hearings in 1986 revealed that EPA inspectors had missed most of the violations. Former Rose Chemicals employees confessed that upon receiving spent transformers and capacitors, they simply removed the PCB-laden materials and tossed them into fifty-gallon drums; later, when even that became too burdensome, they were stashed in one-hundred-pound feed bags that were piled thirty feet high in a "hidden room."

EPA investigators never discovered the secret room because they warned Rose Chemicals' managers up to four days in advance of an inspection. Once advised of the approaching audit, the supervisors would spend the next four days cleaning out the warehouse. On the day of the EPA inspection, all workers were told to stay home.

Martin Thrasher saw it all. Then, as now, director of utility services for Colorado Springs, Thrasher in 1983 contracted with Rose Chemicals to dispose of about 360,000 pounds of PCB-laced equipment. "They had excellent service," he recalls. "If you needed a truck or some paperwork done, they were right there for you.

"Of course," he adds, "it was all fraudulent. It wasn't worth anything."
Thrasher discovered that the hard way in 1984, when the company stopped returning phone calls. Frustrated and suspicious, he and two assistants hopped a plane for Kansas City in the spring of 1986. It turned out that, even though Rose Chemicals had easily obtained its permit from the EPA, the city of Holden had refused to allow the company to build a PCB processing facility. The company had continued collecting fees for disposing of the chemicals, though, and simply stockpiled the toxic waste.

By the time Thrasher arrived, the Rose Chemicals facility had been shuttered. But a couple of employees still hanging around let him into the locked warehouse, Thrasher recalls. They showed him to the back room, which they called the "bag room."

"There were still feed bags piled to the ceiling, leaking oil contaminated with PCBs," Thrasher says. He took pictures, which he keeps to remind him never to trust anyone when it comes to waste disposal--including the government. By 1988, Colorado Springs had paid $300,000 as its share of cleaning up a problem that the EPA could have seen coming--but didn't. Although most of the cleanup work has been completed, the Rose Chemicals site today is still considered a work in progress.

"Kansas City was absolutely rife with these places," says Thrasher. "And what does that tell you? That EPA wasn't on the ball."

In 1990 Carolan and other company officers were sentenced to two years in prison for giving the EPA fraudulent records in connection with Rose Chemicals. But they weren't the only toxic-waste businessmen skirting the law in Kansas City.

In 1981, before he formed Rose Chemicals, before he began piling PCB-riddled equipment into feed bags--before he went to prison--Walter Carolan ran a company called PCB Eliminators. Joining him as a director of the company was a man named Jack Van Gundy, who in 1982 split off and formed PCB, Inc.

The firm's original mission was as a transporter and storer of PCBs. But in 1983 the company received another permit from the EPA allowing it to detoxify PCB oils. And in 1984 PCB, Inc. received a third permit that approved it for dismantling and detoxifying PCB transformers. In short order, Van Gundy, using a handful of other companies he also controlled, spun a complex web of business and ownership arrangements.

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Eric Dexheimer
Contact: Eric Dexheimer