"The Great ASARCO Heist of 2007: How ASARCO Filed Bankruptcy to Pick Your Pocket for $11 Billion"

Quietly, ASARCO just picked your pocket—and not many in El Paso know. By filing bankruptcy in Corpus Christi, ASARCO has delivered a tab for nearly $11 billion to US taxpayers all across the West.  Here’s how.

For over 100 years, ASARCO operated the dirtiest smelters in the West. From lead smelters in El Paso, Omaha, and Tacoma to copper smelters in Arizona, ASARCO’s smokestacks belched out tons of pollutants over the decades. In El Paso alone, ASARCO dumped over 1000 tons of lead over a three year period from 1969 to 1971.  Lead is one of the most toxic and dangerous contaminants around.  If young children ingest lead, they can suffer catastrophic and irreversible brain damage for life.

Now, ASARCO’s tab has come due—and ASARCO wants it paid by you.

Down in Corpus Christi, ASARCO filed Chapter 11 Bankruptcy on August 9, 2005.  Under bankruptcy rules, debt is divided into two piles: secured and unsecured. Secured creditors get paid or take their collateral.  Unsecured creditors usually get pennies on the dollar—or in some cases, nothing.  After 100 years of polluting the West, ASARCO left a big pile of polluted cities.  Nearly $11 billion of environmental claims have been filed by 16 states, two Indian tribes, the federal government, over ninety communities and thousands of private parties.  Of the 75 sites nationwide, El Paso is one of the most affected.  Most of these cities and states will be unsecured creditors.

For example, after smelting lead on the Missouri River near downtown Omaha, ASARCO left toxic levels of lead throughout the city, forcing the EPA to clean up more than 3,000 child care centers, residential homes, and other properties.  In Tacoma, experts estimate that the 100 year old smoke plume from the ASARCO smelter contaminated a swath that covers more than 1,000 miles in three counties.  

Right now, experts in Corpus Christi are totaling all the ASARCO pollution debt---the heist to date is $11 billion.  In Washington State, the Attorney General filed a claim for $600 million to protect the citizens of his state.

What will happen with most of this debt? You the taxpayer will pay to clean it up. ASARCO has one of the nation's most powerful law firms, Baker Botts, fighting every day to shift the cost to you. Why Baker Botts?  Because the ASARCO fight foreshadows other environmental cleanups to come.

So what’s best case scenario?  If the Superfund is made solvent, EPA will clean it slowly over many years. In Omaha, the clean up has lasted eight years.  And if Superfund is not solvent, then individual property owning taxpayers will be strapped directly with clean up costs—$11 billion in contamination delivered straight to the taxpayer, either way.

Meanwhile, back home, here’s what’s going on.  Here’s the pollution map in El Paso:

Click here to view larger image.

Source: Environmental Protection Agency Region 6.

And there may be more contamination.  How, you ask? The answer is: ASARCO and fertilizer.

For years, an El Paso-based fertilizer company, Ionate, sold a fertilizer that was used on the lawns all across our community.  This fertilizer, it turns out, was laden with lead, arsenic, and other hazardous heavy metals.  The now out-of-business company used slag from the Oglebay Norton slag-crushing company in west El Paso as part of the fertilizer.  Oglebay Norton obtained the slag, a byproduct of the smelting process, from ASARCO.  The fact is the EPA never established the eastern boundary of lead contamination in El Paso. We don’t know the full extent of lead on yards in El Paso, but it is significantly more than what ASARCO reports in the Corpus Christi bankruptcy court.  

To date, 3,661 El Paso residential properties have been tested and 868 cleaned up—but in Omaha, the number of properties tested was 32,000 and the number cleaned was almost 3,000, under nearly identical scenarios. So, it’s fair to say that ASARCO has left a surprise for homeowners in our region for many years to come.

What about the ASARCO site itself?  When EPA first came to town, the Region 6 director told me, "Cleaning up onsite will cost $250 million in 2004 dollars."  Since ASARCO has kept a few employees on site since they closed in 1999, ASARCO has technically avoided the federal law that requires it to clean up the 585 acre site.  So when, ASARCO finally closes down, expect the taxpayers to foot that bill too.

What happens, then, to the thousands of homeowners and small businesses who have lead on their property and don’t know it?

When a home property seller goes to sell, any prudent buyer (and title company) will want to know about lead. Texas law requires sellers to disclose any lead as a defect.  Prudent home buyers will ask for an EPA certificate that the property is lead-free. So, sellers will have to go get a test, and if the property has lead, pay to clean it up. The average cost of a consumer cleanup is $20,000 - $30,000.  In other words, ASARCO lead will be cleaned up by El Paso homeowners at their expense since ASARCO is asking that all liabilities be discharged once the bankruptcy is done.

One environmental expert, Dr. Devra Davis, calls the ASARCO bankruptcy "a test-case for world-wide industrial interests to show how environmental liabilities can be shed—passed onto the people who actually suffered the damages in the first place."

Out here in the West we’ve seen our share of heists over the years—but "The Great ASARCO Heist of 2007" has to be one of the biggest ever!

Eliot Shapleigh