Negotiations for Power
The first NRDA negotiation between Thompson's DNR, and the U.S. EPA, U.S. Fish & Wildlife Service, National Oceanic & Atmospheric Administration, and the Menominee and Oneida Nations occurred on December 20, 1996. At this negotiation, Thompson's DNR laid out three conditions which had to occur before the state would participate in the federal NRDA.28
1. No Tribes --- The state refused to negotiate with or enter into any agreement with Tribes as co-trustees, though the federal law states that Tribes have the right to serve as co-trustees in an NRDA.
2. State as Arbitrator --- The state demanded that the DNR (under Thompson's control) be allowed final decisions when the federal, tribal and state agencies disagreed on a course of action. In other words, the Governor wanted control over the NRDA though the Governor had aggressively lobbied against it, and the DNR had not contributed to the preparation of the NRDA for the previous three years.
3. State Decides Responsibility ---Thompson's DNR
demanded that the DNR have sole authority to allocate responsibility for
natural resources among the trustees --- and the DNR wanted to assume all
responsibility for contaminated sediments in the Fox River, to the exclusion
of the federal and tribal parties. Sediments are the key issue, yet
the Governor refused to share responsibilities and pursue cooperative
efforts.
The other parties argued that the natural resources of the River, Bay,
and Lake Michigan are a shared national treasure and all parties have a
mutual interest in their protection, management and wise use.
Industry Consultants Hired
The most significant aspect of the January 30,1997 $10 million Governor/Polluter
settlement agreement is the section allowing the Fox River Group
(the 7 paper mills) to decide which consultants to hire for the technical
work.27 DNR staff could veto the industry nominations,
but not nominate the DNR's own preferred consultants.
As a result, several consulting firms have been hired which usually
represent polluting industries against states and the federal government
around the country. Many of these consultants are highly skilled
in helping polluters avoid cleanup costs.
In addition, the $10 million was not provided to the DNR up front,
nor does the settlement contract create a specific budget which determines
how much money will be spent on different aspects of the consulting work.
The Fox River Group is spending millions of dollars hiring numerous consultants,
without DNR oversight, and it is unclear which consultants are included
in the $10 million agreement. In other words, the distinction between
the DNR and industry consultants is blurred.
When the consultants provide their research results, or other work
products to the DNR, to become part of the state's official NRDA, the DNR
can accept, reject or recommend modifications to the consultant's work.
However, if a consultant persists in sending unacceptable work to DNR,
the settlement doesn't allow the DNR to hire other consultants to do the
work.
The DNR staff say the state has a "standoffish relationship" with the
Fox River Group consultants. They acknowledge that "in an ideal world"
the state would provide its own resources on this issue, but under the
Governor/Polluter agreement, the Fox River Group controls the money.
As one DNR staff person stated, "it is a long drawn-out process to
get anything done .... excruciating in every sense of the word."
At any given meeting, the DNR staff are greatly outnumbered by polluter
lobbyists, lawyers and consultants.
Deloitte & Touche --- Using funds
provided by the Fox River Group, and on the recommendation of the polluters'
attorneys, the DNR has hired Keith Easton, an attorney with Deloitte &
Touche, to help the DNR coordinate all the consultants' NRDA work products,
assess the quality of the work products, and evaluate whether the state's
interests are protected in the legal processes involved with the state's
NRDA cleanup.
(The federal agencies had recommended that the DNR hire a nationally
recognized government NRDA expert named Ken Ward, and DNR staff had agreed,
but Keith Easton was hired instead.)
Deloitte Touche Tohmatsu International is a huge corporation with over
63,000 employees in 126 countries. They provide professional, accounting,
auditing, tax and management consulting services, primarily to industry.37
According to their Internet homepage, the firm has a "Process Industries
Group" with "practitioners serving the world's major chemical and process-related
corporations in finance, strategy, operations, information technology and
organizational infrastructures."37 The chemical
industry is strongly tied to the pulp & paper industry.
According to the Deloitte & Touche Internet homepage, "Capital
expenditures for environmental purposes such as pollution abatement add
to energy costs, operating costs and waste costs, resulting in lower production
efficiency... What is the industry's average rate of return on environmental
expenditures? How will the industry reconcile these issues?"37
These quotes and others show Deloitte & Touche is financially tied
to the paper industry and other industries subject to Superfund and NRDA
cases, which represents a serious conflict of interest.
Deloitte & Touche has also been centrally involved in structuring
Gov. Thompson's W-2 (Welfare to Work) program.37
Leaders of Deloitte & Touche donated $3,800 to Thompson's campaign
in 1994-95.7
de maximus --- This firm was first
hired to work on the paper mills' behalf, but has now been given greater
responsibility under the Governor/Polluter agreement. De maximus
is the primary contractor for Project Oversight and all the Fox River Group
consultants answer to them.
This consulting firm generally works for groups of industries responsible
for toxic waste cleanups. One of their cases was a Superfund site
near the Ashtabula River in Ohio, called Fields Brook.
Now that they have been hired under the auspices of the Governor/Polluter
agreement, Traverse and the other industry consultants are using their
DNR legitimacy to request from federal agencies information which is ordinarily
not given to polluters due to litigation concerns.
Traverse also tried to submit applications to federal agencies for
environmental sample collection permits using the DNR as a co-applicant
with the Fox River Group. The DNR had to correct this and ensure
the Fox River Group maintained sole responsibility.
Remediation Technologies Inc. (ReTec)
--- After a long period of state and federal negotiations, with Gov. Thompson
pushing hard on Congress and the Clinton Administration to support state
control, EPA decided to provide $1.6 million to the DNR and allow the DNR
to lead the Remedial Investigation and Feasibility Study (RIFS), which
is the first stage of the federal Superfund process. Several consultants
were interviewed for the job.
Gov. Thompson's DNR followed the wishes of the Fox River Group and
voted for ReTec. The U.S. EPA preferred other consultants.
The Fish & Wildlife Service did not have a vote. The DNR and
Fox River Group choice prevailed and ReTec was hired.
ReTec is a subsidiary of Thermo Remediation, a Thermo Electron company.38
Thermo Electron(39) includes 23 companies, including
Thermo Fibertek,(40) an international conglomerate
which owns 12 companies which manufacture paper machine accessories, process
equipment, recycled fiber equipment, and water management systems for paper
companies, especially recyclers.
One of their companies, Thermo Wisconsin, Inc.(40)
maintains its central manufacturing and laboratory facilities in Kaukauna,
and specializes in drying technologies and incinerators used in the paper
industry.
Another of their companies, Thermo Fibergen,(74)
operates GranTek in Green Bay.73 GranTek
is the first of a series of plants Thermo Fibertek plans to build which
take wastewater treatment plant sludge from paper companies, dries the
sludge and sells it to use as the inert ingredients of pesticides, fertilizers,
pharmeceuticals for livestock, and kitty litter. The sludge is contaminated
with PCBs. GranTek has an air pollution permit from Thompson's
DNR to release 10 pounds of PCBs into Green Bay's air each year.
More than 1,000 pounds of PCBs could be distributed each year with the
dried sludge product from this one Green Bay facility. Fort James
Corp. is the main provider of sludge to GranTek.
ReTec has a serious conflict of interest, because it is financially
tied to ongoing activities at Fort James Corporation, the largest of the
Fox River Group paper mills, and may also be financially tied to other
paper companies involved with Fox River cleanup.
Top employees of Fort Howard Corp. (now Fort James) gave $32,335.00
to Gov. Thompson and Lt. Gov. McCallum election campaigns from 1991 to
1997.7
According to the DNR staff overseeing ReTec's work, ReTec did not disclose
this conflict of interest during the initial consultant selection process
and the DNR did not require any written disclosures. On their Internet
homepage, ReTec openly states, "We are advocates for our clients ....
ReTec provides industry with innovative and cost-effective solutions to
environmental challenges."38
ReTec offers their expertise to " a broad range of industries.
These include: agricultural chemicals, manufacturing, manufactured gas,
oil and gas production, petroleum refining, petrochemical, railroads, utilities."
They add, "ReTec excels at developing least-cost strategies that achieve
the clients cost and time objectives."38
Also on their Internet homepage, they state, "We are active participants
in industry trade associations that track and seek to influence upcoming
legislation and regulations. ReTec is an affiliate member of
the American Petroleum Institute, the National Petroleum Refiners Association,
the American Wood Preservers Institute, and the Association of American
Railroads. In addition, our staff sits on the Superfund
and RCRA subcommittees for the National Association of Manufacturers."38
[emphasis added]
No mention is made on their Internet homepage of ReTec performing any
work for governments.
These quotes and others show that ReTec is financially tied to the
paper industry and advocates on behalf of many other industries subject
to Superfund and NRDA cases, which represents a serious conflict of interest
in this case.
Natural Resources Technology (NRT)
--- This firm, based in Pewaukee, is a subcontractor to ReTec, working
on the Remedial Investigation half of the RIFS. NRT formerly
worked for Wis. Electric Power Co. on a contaminated coal gas site.
NRT is developing background mapping of the physical, chemical, and
biological information about the river, and will delineate the volume,
quality, and surface area of contaminated sediments to be remediated.
This last item is especially significant, because the polluters will want
to deal with as little sediment as possible.
W. F. Baird & Associates ---
This is a coastal research, development, and engineering firm,with four
offices worldwide, including one in Madison.41
Baird is another subcontractor to ReTec, working on hydrodynamic, sediment,
and contaminant transport computer modeling for the Superfund RIFS.
They are also subcontracting to Limno-Tech for related modeling work.
Triangle Economics Research (TER)
--- An economic analysis of damages is a key portion of any Natural Resource
Damage Assessment (NRDA).
At industry's urging, Thompson's DNR allowed William Desvousges, of
TER, to be hired by the Fox River Group to conduct the state's economic
assessment of PCB damages, under the state's NRDA.
William Desvousges is an expert witness used by industries all around
the country to fight against economic damage claims under NRDAs.
TER's past clients include Alcoa, ARCO, General Motors, and several large
power utilities and oil companies, in addition to EPA and the state of
Nevada.42 Desvousges was an expert witness in
legal actions defending EXXON in the Valdez Oil Spill case in Alaska.
TER lobbied on the side of the the oil industry during Congressional
debates on the Oil Pollution Act of 1990 Regulations. This Act involves
NRDAs used in cleaning up oil spills.
Desvousges has argued that non-market based values can't be defended
in a legal process. Yet these values are critically important to
the U.S. Fish and Wildlife Services' economic assessment under the federal
NRDA. The differing views will conflict in court.
Keith Easton, of Deloitte & Touche, will play a key role in evaluating
and responding to Desvousges' work product on behalf of the DNR.
This means a consultant chosen by the Fox River Group polluters will oversee
another consultant chosen by the Fox River Group polluters, and Thompson's
DNR will endorse the result.
Exponent Environmental Group (formerly PTI Environmental
Services)
The Fox River Group hired this firm to fulfill two roles (1) determination
of "injuries" under the NRDA, and (2) an evaluation of fish quality and
contamination. These are critical parts of an ecological and biological
risk assessment for the state's NRDA.
Exponent's Internet homepage states, "Natural resource damages are
a 'sleeping giant' of corporate environmental liability. Potential
claims are enormous and settlement or litigation costs are often very high....
Exponent can help clients minimize costs associated with claims for damages
to natural resources."43
Exponent promotes "habitat equivalency analysis," (HEA) to estimate
acceptable habitat "replacements" as part of damage compensation.43
(Triangle Economic Research's William Desvousges is also a promoter of
HEA solutions.)
According to DNR staff, industries generally use HEA to escape damage
payments. Many polluters would rather purchase existing habitat as
a "replacement" than pay much higher costs of cleaning up and restoring
a damaged habitat. We've already seen a local example, with the $10
million Governor/Polluter agreement paying for habitat purchase, structures,
trails, and parking lots at Thousand Islands Nature Center and Point au
Sable.
On Exponent's Internet homepage, they also state, "Exponent staff
identify pivotal sources of uncertainty affecting risk estimates and help
design and conduct research to support more realistic assessments of risk."43
Industries frequently emphasize "uncertainties" in court to avoid financial
liabilities. Thompson's DNR could end up legitimizing these
polluter arguments in court.
Entrix Environmental Consultants
--This is a large firm with 1997 revenues of $30 million.44
Entrix usually provides expert testimony in court on behalf of polluting
industries. For example, Entrix represented Texaco Oil Company in
an oil spill case in Terrebone Bay of Lake Barre' in Louisiana.
According to Entrix's Internet homepage, other clients include "oil,
gas, and pipeline industries, electric utilities, the chemical industry,
auto manufacturers, transportation companies, mining companies, manufacturers
of industrial equipment, electronics industry, forest products industry,
law firms, and government."44
An Entrix specialty is "strategic management of liability."44
Their homepage states: "... many remedial actions may be causing more ecological
harm than good. While ecological liabilities are a fast-growing area
of environmental liability, state and federal agencies only recently have
developed policies and regulations to deal with this situation. This
fact has created significant flexibility that can work to the benefit or
detriment of a potentially responsible party. Developing and implementing
strategies that capture this flexibility are important in the overall reduction
of liability for the potentially responsible party."44
Entrix consultant John Giesy, of Michigan State University, has been
hired by the Fox River Group to perform PCB risk assessments for the state's
NRDA.
Giesy was recently quoted in the Green Bay Press Gazette on August
2, 1998, suggesting a "bounty system for fish in which the state would
exchange a clean fish for a contaminated fish caught in the Fox River ---
as well as a $10 incentive. The system lowers public exposure to
PCBs without discouraging the local boating and fishing economy."45
Giesy also says Bald Eagles can be fed clean fish from buckets, to prevent
their exposure to Fox River PCB contamination.
He also stated, "When we look at alternative actions, we want to
make sure we take ones that are appropriate from an economic and human
health standpoint. It is not very useful if the risk is fairly marginal
--- which it probably is for the population living around the Fox River
--- to raise expectations to the point where you can't fulfill them."45
By allowing Giesy to write the state's risk assessment, the DNR is
legitimizing the work of an industry consultant who argues that Fox River
human health risks are "marginal." This is not a strong position
for the state, if Thompson's DNR intends to require a cleanup.
Limno-Tech Inc. (LTI Environmental Engineering)
--- This Ann Arbor, Michigan, firm is working for the Fox
River Group on computer simulations of water, sediment and fish quality.
According to the company's Internet homepage, Limno-Tech has provided
environmental consulting services to the paper industry for more than 20
years.46 LTI has also worked for governments,
such as EPA, on the Hudson River in New York.
HydroQual, Inc. --- This consultant is a subcontractor to ReTec to assist with ecological risk assessments and computer modeling. HydroQual is studying hydrodynamics, sediment transport and particle dynamics (algae transformation) in the river and bay.
Blasland, Bouck & Lee (BBL) ---
P.H. Glatfelter Paper Co. hired BBL in 1991 for an independent Remedial
Investigation and Feasibility Study of PCB contamination in Deposit A in
Little Lake Butte des Morts, a flowage of the Fox River near Neenah.
They recommended no action.
BBL usually works for the "potentially responsible parties" in such
cases, and usually recommends no action, or just capping, as they did when
they worked for Manistique Paper Company in Michigan.
Other clients of BBL include EXXON, Aetna, Allied Signal, Amoco, AT&T,
Bristol-Myers Squibb, Chevron, Chrysler, Coca-Cola, Eastman Kodak, DuPont,
Enron, Ford, General Electric, GM, Lockheed Martin, Mobil, Rockwell International,
many oil, gas, and utility companies, municipalities, and law firms.48
BBL's internet homepage states, "Environmental consultants
must have a thorough understanding of the legal process and their role
in it and be prepared to assume that role on a client's behalf. BBL
has been successfully supporting our clients in regulatory and legal arenas
alike, with results that maximize protection of the environment while minimizing
client liability."48
Last September, BBL went to Manistique to collect samples during EPA
dredging there, and was observed using a long surveyor's "stadia rod" many
times, purportedly for "depth measurements," which stirred up the sediments
prior to taking turbidity measurements of water quality. These samples
could have been used to argue inaccurately that dredging stirred up PCBs.
EPA's on-site Dredging Coordinator Walter Nied had observed BBL's sampling
process, and directed them to dump the water samples and come back only
after they had an approved sampling workplan.
In November, BBL came back to sample in the middle of the dredging,
to claim EPA's dredging left PCBs behind,(49) though
EPA clearly hadn't finished yet.
This company is very active in negotiations on behalf of the Fox River
Group. BBL has also been an aggressive industry advocate on
the Hudson River, Sheboygan Harbor, and at Ruck Pond in Milwaukee --- other
PCB sediment cleanup sites.
Foth & Van Dyke --- This local
consulting firm was hired by the DNR to coordinate and conduct work on
the Deposit N demonstration project in Kimberly.
Foth & Van Dyke frequently works for the paper industry and recently
worked for Exxon on technical aspects of the Crandon Mine on the Wolf River.
Foth & Van Dyke was also the principle engineering firm for the
Flambeau Mine Reclamation plan which recently required major revisions
due to the inadequacy of the prairie planting and maintenance design.
Leaders of Foth & Van Dyke donated $3,350 to Gov. Thompson's and
Lt. Gov. McCallum's re-election campaigns from 1990 to 1997.7
Montgomery Watson --- This consulting
firm was recently hired by the DNR to coordinate and conduct work on the
Deposit 56/57 demonstration project downstream from the Fort James Mill
in Green Bay.
Montgomery Watson is a large worldwide engineering, construction, technology
and management company which has worked for both industry and governments.
Mining companies have been major clients.72
Leaders of Montgomery Watson donated $600 to Gov. Thompson's re-elections,
in 1996 and 1997.7
Ecochem, Inc. --- This consultant
is conducting data validation for the federal agencies, and is also a subcontractor
to ReTec.
Paper Industry Allies
The pulp and paper industry in Wisconsin is closely tied to many law
firms, insurance companies, financial institutions, and lobbying firms.
Altogether, these interests have donated $1,939,566 to Gov. Thompson's
and Lt. Gov. McCallum's campaigns between 1990 & 1997.7
The insurance industry would be particularly interested in avoiding
the liability for Fox River cleanup. Financial institutions would
be interested in the financial stability and vigor of the largest industrial
sector in Wisconsin. These types of institutions have been very active
in attacking the federal Superfund program, on behalf of polluting industries.
The chemical, oil and other industries are also working to weaken Superfund.51
Together, they have a strong interest in preventing a national precedent
from being set here in Wisconsin.
The Realtors Association of N.E. Wisconsin, Inc. also lobbied recently
against Superfund, because they feared real estate investments would drop.52
Realtors, developers and special interest groups who represent their views
donated more than $406,339 to Gov. Thompson's elections, from 1993 to 1997.7
Thompson's DNR & Tourism
The Tourism Industry gave $432,923 to Gov. Thompson and Lt. Gov. McCallum
for their re-election campaigns, 1991 to 1997.7
For years, many representatives of this industry have strongly opposed
publicity concerning fish-eating advisories for PCBs, because of adverse
effects on tourism. Many charter-boat and sportfishing business leaders
oppose PCB fish warnings.57
During the past year, many local government officials have lobbied
against Superfund listing because tourism leaders feared the "stigma" of
Superfund would scare tourists away from the Fox River Valley.56
Many DNR staff also seem to discourage publicity about fish eating
advisories because warnings reduce the purchase of fishing licenses, the
major source of funds for the DNR's fishery programs and staff.
DNR Report Sections:
Twelve
Years of Delay - A Fox River Clean-up Timeline
The
Health Risks of PCBs and Landfilling Contaminated Sludge
Legislative
Connections, Paper Company Economics, and Industry Control of the Process
The
Fed's Step In
Conclusions
and Recommendations
The
Paper Money Trail - Political Campaign Contributions to the Governor
DNR
Report Study Methods
References
