A Dirty Shame

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The EPA was as lax with PCB, Inc. as it was with nearby Rose Chemicals--if not more so. The agency didn't conduct its first detailed records inspection of the PCB, Inc. facility for more than two years after it opened. And then the review clearly showed that the company was already falsifying disposal records, indicating that PCBs had been destroyed when in fact they had not. A succession of other inquiries found that the company had been illegally dumping some PCB-contaminated capacitors in landfills.

By the fall of 1986, the EPA had levied fines totaling more than $4 million against PCB, Inc. and a sister company owned by Van Gundy. None of it was collected.

But despite the growing hill of damning evidence, the EPA did not shut the company down. Instead, the agency allowed PCB, Inc. to continue operating until its permits expired in February 1987. Even then, the company carried on as a broker of PCB waste for another year.

"So in September 1985 the situation with PCB, Inc. was this," Mike Synar, an Oklahoma representative, wondered out loud to an EPA official during a 1987 congressional hearing. "EPA was unable to determine how much material was going in and out of the facility; you also had clear evidence that the company was disposing of some PCB material improperly; and EPA was aware of allegations that PCB material was being dumped illegally. Why was this company allowed to continue operating?"

PCB, Inc. went out of business the next year, declaring itself bankrupt. Jack Van Gundy, the sole owner of the company, died soon after.

In 1988, after further congressional hearings into how Kansas City's PCB disposal businesses had gotten so out of hand so quickly, the federal General Accounting Office published its report, Laundering Waste: EPA's Efforts to Prevent Criminal Activity in PCB Disposal. The government's self-investigatory arm discovered that for many officers and associates of PCB, Inc. and its sister companies, mishandling toxic waste was just their latest criminal enterprise.

Joseph Cannova, the former president of one of Van Gundy's companies, had been convicted of mail fraud and income tax evasion, charges that had grown out of an investigation by the Kansas City Organized Crime Strike Force. "In reviewing intelligence files, GAO also found repeated references to alleged criminal activity by persons associated with PCB, Inc," a 1989 congressional report concluded. "These included involvement in narcotics, prostitution, pornography, loan-sharking, illegal gambling, arson, insurance fraud, bank fraud, and extortion."

As with PCB, Inc.'s mishandling of toxic waste, the EPA seemed to know all about these criminal connections, too. By 1984 the agency's National Enforcement Investigations Center had compiled reports reflecting ties between officers of PCB, Inc. and "organized crime associations." Indeed, as early as 1982 local EPA officials had been contacted by the Kansas City Police Department and advised that men associated with PCB, Inc. were under investigation for bank fraud.

Despite such information, however, the EPA had quickly granted permits to PCB, Inc. to dispose of millions of pounds of highly toxic chemicals.

Darrell Davis was working as the superintendent of utilities for Center (population 1,600) in 1982 when the town decided it was time to jettison its transformers insulated with PCBs. "We were trying to live by the law and get rid of these things," he recalls.

Davis learned of PCB, Inc. from other Colorado utilities managers who were sending their old electrical equipment to the company. (Although Colorado falls in the EPA's Region 8, Kansas City boasted the closest companies that could deal with PCB disposal.) Center eventually sent about 3,000 pounds of tainted equipment to PCB, Inc. through a transporter named Trinity Chemical; the town paid about $10,000 to dump the machines according to the law. "We kept the manifest records and eventuall, we received a beautiful Certificate of Destruction from PCB," Davis recalls. "It has a gold seal on it."

The city of Gunnison (population 6,000), south of Glenwood Springs, also hired Trinity Chemical to haul six transformers to PCB, Inc. in 1984. "We have all our Certificates of Destruction and manifests," says Ken Bradford, supervisor of the city's electrical department. "We figured we were doing the right thing: PCB, Inc. and Trinity were both licensed by the EPA."

The Y-W Electrical Association, a rural cooperative that provides power to residents and businesses of Yuma and Washington counties on Colorado's northeastern plains, sent twelve capacitors to PCB, Inc. Highline Electric Association, a co-op based in Holyoke that powers irrigation systems in eleven counties in northeastern Colorado and western Kansas, sent about 1,200 pounds of PCB-laced machinery to Kansas City.

Westplains Energy, a small utility company that provides electricity to about 76,000 customers in the Pueblo area, unknowingly inherited the PCB, Inc. headache. In 1983, and then again in 1984, a company called Centel had shipped loads of old capacitors to PCB, Inc.--36,000 pounds of contaminated equipment in all. In 1990 Centel was purchased by UtiliCorp, which renamed the utility company Westplains. Three months ago, the new owners learned they probably will be liable for tens of thousands of dollars in cleanup costs.

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Eric Dexheimer
Contact: Eric Dexheimer