By Joaquin Sapien and Alex Knott
Data analysis by Richard Mullins
In a complaint filed in the company's bankruptcy case, they claim that Solutia's parent company, Pharmacia Corp., moved an excessive amount of its environmental liabilities, including high Superfund cleanup costs onto Solutia.
Pharmacia acquired the Superfund liabilities when it merged with Monsanto Co. in 2000.
Monsanto is listed fourth on a 2002 EPA list of about 100 companies determined to be a "potentially responsible party" for the most Superfund sites. EPA linked the company to 56 sites, according to the confidential list obtained by the Center for Public Integrity.
However, a Monsanto representative, Glynn Young, told the Center that "as it stands today," the company is connected to just one Superfund site after "various corporate changes."
How did a company that was once ranked among those linked to the most Superfund sites fall off the list entirely?
The turn of events involving Monsanto, Pharmacia and Solutia illustrates the complex corporate maneuvering that can blur financial responsibility for cleanups at Superfund sites.
The Center's investigation into Superfund and companies with ties to America's worst toxic waste sites found several cases of mergers, spinoffs, buyouts and bankruptcies that resulted in avoiding Superfund liabilities.
Monsanto is one of 26 companies on the EPA list that challenged specific instances of EPA databases listing their names in connection with 179 contaminated sites. Following calls from company officials questioning the EPA records, the Center chose to remove the sites from each of those companies' profile pages and from any stories quantifying the number of Superfund sites connected to the companies.
A significant number of the 26 companies cited mergers, acquisitions and other types of corporate restructuring as proof their company was no longer responsible for the environmental liabilities. Others stated that they never received any notice from the EPA regarding the sites or that the agency absolved them of any involvement.
Young's e-mail said that Monsanto's chemicals division was spun off to become Solutia and that the agreement passed along the environmental liabilities. If Solutia failed to meet them, the agreement stipulated that Monsanto would assume responsibility, he said.
In 2000, another division of Monsanto's life sciences business merged with Pharmacia and Upjohn to form Pharmacia Corp. Then in 2002, the agricultural division of Pharmacia, once part of Monsanto's life sciences business, was spun off and later reemerged as a new version of Monsanto. Pharmacia was later acquired by Pfizer Inc.
The company that the Center contacted was the "new" Monsanto, whose officials said it is not associated with the waste that the company was connected to before the spinoffs and mergers took place.
Other companies that reduced a large part of their Superfund liabilities through similar transactions include Rockwell Automation and CBS Corp. Rockwell Automation said it has transferred the liability for 20 Superfund sites where the name "Rockwell" appeared in EPA databases to a series of companies that bought business units from Rockwell. The purchasers included Boeing Co., ArvinMeritor Inc. and Rockwell Collins Inc. CBS reviewed a list of sites compiled by the Center and stated that liabilities for two of the 81 sites had been transferred to other corporations.
Borg-Warner Corp., for example, was ranked No. 62 on the EPA's list, but the current BorgWarner Inc. initially disclaimed responsibility for many of the Superfund sites that the Center identified.
In a letter to the Center, Peter Holmes, the company's corporate counsel, said the firm "underwent a leveraged buyout in 1987 that included the creation of new companies and several mergers." After sending that letter, the company agreed that it is connected as a potentially responsible party to seven sites.
Identifying the current parent companies for some of the corporate entities listed in the EPA's list posed a significant challenge.
For example, Koppers Chemical Co., listed at No. 69 on the list, ceased to exist under that name some time after the Superfund law was enacted in 1980. The Center searched for Koppers' parent company and tried to determine which sites the parent company had inherited. But since Koppers had gone through multiple buyouts, the liability for the 52 sites linked to Koppers was murky.
Initially, Center researchers sent verification letters to Saratoga Partners, which owned part of what remained of the old company. But in a letter to the Center, Saratoga indicated that it was only a minority shareholder and that another company, Beazer PLC, was responsible for a large number of the Superfund sites.
Beazer did inherit the sites Koppers Chemical was linked to by buying the publicly-traded stocks of the company in 1988. Beazer confirmed ties to 34 sites, but said it did not have records for seven sites and disputed liability for 11 other sites that Koppers was tied to.
Beazer is now a subsidiary of UK-based Hanson PLC.
Some companies insisted that they were no longer liable for certain sites because other companies had assumed liability but that they could not disclose the name of the company because of a confidential agreement.
The Center found that BASF, listed No. 39 on the EPA list which connected it to 20 sites, indicated that the company was identified in other EPA records as a potentially responsible party at 74 sites. But the company told the Center it didn't have any records for seven of the sites and that it was not responsible for another 27 because another company had assumed liability. Revealing the name of that company, however, would violate a confidential agreement, BASF officials said.
Lost in the mail
At least 18 companies on the EPA's list, including Beazer and BASF, told the Center that they had never been told by the EPA that the agency's database linked them to a total of 123 sites.
For instance, Chemtura Corp. told the Center that it did not have any records for 18 of the 76 sites that are connected by the EPA to Chemtura or names similar to its various company names and subsidiaries. Similarly, Occidental Petroleum Corp. (37 sites), Allied Waste Industries Inc. (14 sites) and Chevron Corp. (7 sites) all said that they had no record linking their companies to the sites that the database ties to them.
The Center sent the EPA more than 200 records of companies that challenged the EPA's databases, which listed the companies among the 100 connected to the most sites, or that claimed to have never received any letters or other records connecting them to environmental liabilities.
While some of the companies doubted the accuracy of EPA's record-keeping, EPA officials accused some of the corporations of the same thing.
"The fact that companies claim no record of receiving a notice letter may be attributed to various causes, and we can only speculate as to why a company has no record of receiving a notice letter from EPA," the agency said in a written statement after receiving records from the Center in which companies claimed no notification. "For example, we reviewed two of the entries on the list of 'no record' sites and determined that EPA had settled with a subsidiary of the parent company listed (although we do not know and do not track whether it was a subsidiary at the time of settlement)."
At least two companies offered the Center their own list of sites, which varied substantially from the sites that researchers had found the companies to be connected to. Bayer Co., for example sent the Center a list of 26 sites that the company acknowledged its responsibility for, of these 12 matched the list of 52 that Center researchers developed. Similarly, Wyeth sent the Center a list of 43 sites; 31 of the sites they sent overlapped with the list of 69 sites that the Center found the company to be linked to. In both cases, the Center accepted the companies' lists.
Contractors also challenge EPA list
Besides examining companies on the EPA list, the Center ran the EPA's biggest contractors through the agency's database of Superfund sites. One of those contractors, Halliburton Company, and one of its former subsidiaries, Brown and Root (now KBR Inc.), were found to be connected to at least 25 sites. In addition, Dresser Industries, a company on the EPA list, initially was identified as a subsidiary to Halliburton.
Dresser Industries was found linked to 24 sites, adding another 14 to Halliburton's total. Several sites were shared between the two companies. But Halliburton told the Center that it confirmed responsibility for only four Superfund sites and that Dresser Industries declared bankruptcy in 2002. The Center removed the other 35 Superfund sites from Halliburton's profile page.
Halliburton's documents seem to support the company's contention that it is responsible for fewer sites than the EPA states. The company stated in its "Health, Safety and Environment 2001 Annual Report" that it had only nine sites.
Company feedback
Click here for information about companies that have disputed or have no record of involvement with certain Superfund sites.
Kevin Bogardus and Anupama Narayanswamy contributed to this report.
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