A Matter of Trust

Page 8 of 10

Public monies were used to fund both the Lowry litigation effort and the cleanup, yet Denver residents know virtually nothing about the settlements, because all related documents were sealed by then-federal judge Sherman Finesilver.

According to Steven Coon, an assistant city attorney who worked on the deal, Webb and Denver City Council members were briefed on the settlements and trust arrangements, but he's not sure if they saw the actual agreements. "All we can tell you is a number of people -- judges and magistrates -- reviewed the agreements and came to the conclusion that they were a good deal for the city," Coon says.

Waste Management insisted on a confidentiality agreement because it was concerned that the "protections" offered to the settling parties through optional premiums would be demanded at other sites if they became known. As Robert Driscoll, one of the company's attorneys, explained at a February 8, 1995 hearing: "These are protections that my client, Waste Management, would not have given in this case or in the underlying litigation, in the Coors litigation, had it thought that the documents would become part of the public domain, simply because they could serve as a possible benchmark for protection demanded from my client at other sites..."

Federal judge Jim Carrigan, who presided over that hearing, was not easily persuaded. "This is a public court, and the public has a right to know what's going on here," he said. He agreed to keep the settlements sealed, but left open the possibility that they might someday be unsealed if someone were to file a motion making a "strong showing" that it was in the public interest. (An earlier request by the Denver Post to examine the settlement agreements had been denied.)

Although the terms of the settlement are still sealed, Westword found a four-page spreadsheet in court files stored at the Federal Records Center that outlines deals with 166 businesses or governmental agencies that had dumped at Lowry. Using this document, as well as a companion set of interrogatories that had apparently been misfiled, it's possible to piece together a rough outline of the settlements.

Sullivan and Coon, the two assistant city attorneys most familiar with the settlements and the resulting trust funds, refused to discuss the documents, citing the judge's confidentiality order. "Whatever information you have, you have," Coons says. "But we're still bound by the court order."

Here's how the settlements were structured:

The polluters were divided into categories based upon how much they'd dumped at Lowry. There were the small, or de minimis, settlors; the mid-tier settlors and the high-tier settlors. Each was then assessed a basic cleanup cost that was subsequently reduced by 20 percent to account for the amount owed by Denver and Waste Management.

The de minimis settlors made up the largest group by far. More than 120 polluters fell into this category, including Sears Roebuck, US West, Honeywell, the Denver Post and the Rocky Mountain News.

The mid-tier settlors included such companies as Eastman Kodak, IBM, Coors Ceramics, Hewlett-Packard, Safeway and the cities of Lakewood, Littleton and Glendale. These settlors have "reopener" clauses in their agreements that could be triggered if the actual cost of the Lowry cleanup winds up larger than the original estimate.

The high-tier polluters -- Adolph Coors, Syntex Chemicals, Shattuck and Conoco -- have pay-as-you-go arrangements in their settlement deals. The payments owed by these large companies were based on actual costs incurred at Lowry over five-year periods. These costs include both day-to-day operations and monies spent on large capital projects, such as the new water-treatment plant, the slurry wall and the gas extraction system.

In addition to these basic settlement costs, the companies were given the opportunity to purchase a variety of premiums protecting them from future uncertainties at Lowry that could range from cost overruns to lawsuits brought by neighbors to a potential radioactive component of the cleanup. Even fines levied by the EPA are apparently covered. "The greater the assumed obligation premium a settlor was willing to pay, the more potential future obligations of the settlor plaintiffs were willing to assume," explained Judge Finesilver in one ruling.

Sixteen companies chose to purchase the radioactive premium, for a total of $1.72 million. Among them were Safeway, Ball Corporation, Coors Ceramics, Eastman Kodak, Hewlett-Packard, IBM and the cities of Lakewood, Littleton, Englewood and Glendale.

Sometimes the premiums paid by the polluters surpassed the actual money put toward the cleanup remedy. Sundstrand Corporation, for example, paid roughly $661,005 in remediation costs; another $1,582,194 for a cost overrun/risk premium; $640,600 for a combo premium called "natural resource damage/toxic tort/assumed obligation"; $331,300 for the radioactive premium; and $800,000 for what was known as an "orphan share."

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Eileen Welsome