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Grand jury query targets Grace

| November 2, 2004 11:00 PM

By Roger Morris Western News Publisher

W.R. Grace is the target of criminal investigation by a federal grand jury based in Missoula, according to a press release from the Columbia, Md., based corporation.

The press release from W.R. Grace says it received a letter on Friday, Oct. 29, informing the company that it has been ³named as a target of a federal grand jury investigation involving possible obstruction of federal agency proceedings, violations of federal environmental laws and conspiring with others to violate federal environmental laws.²

None of the government agencies involved in the investigation or the grand jury would comment Monday on whether there was an investigation or whether there is a grand jury convened.

³Grace believes that the investigation is related to its former vermiculite mining and processing activities in Libby, Montana,² the press release said. ³Grace has not been advised of any details about the possible violations of law and is unable to assess at this point whether the results of this investigation will be material to Grace.²

The company did say it is aware that several current and former senior-level employees associated with Grace¹s construction products businesses have been named as ³targets² of the investigation.

EPA criminal investigators were in Libby throughout the summer months, and even served as part of the security detail when EPA director Mike Leavitt made a surprise visit to the community in late August.

However, John Wardell, EPA director for the state of Montana, said the agency does not make comments on criminal investigations. Wardell, and a legal official in the EPA¹s regional headquarters in Denver, referred The Western News¹ inquiries to the U.S. Attorney¹s office in Missoula, who did not return the newspaper¹s call seeking confirmation of the investigation and grand jury.

Gayla Benefield, an asbestos activist in Libby, said there had been rumors of an investigation circulating throughout the summer.

³It¹s really a tragedy it had to go this far,² Benefield said. ³The company should have taken responsibility years ago.²

Asbestos victims, as well as members of the Community Advisory Group to the EPA, have been calling for a criminal investigation since the EPA first arrived in Libby in November 1999. The EPA responded to a series of newspaper articles in the Seattle Intelligencer about the asbestos-related disease left behind from Grace¹s former mining and milling operations in Libby.

³People were asking four to five years ago for the company to be held accountable,² Benefield said. ³It¹s been a rumor for sometime that they will be held accountable.²

Before filing for bankruptcy in April 2001, the company had lost several civil suits to former employees or their families. In those suits, it came out that the company had known of the health hazards at its Libby operations when it purchased the operations from the Zonolite Co.

In addition, federal and state studies through the 1970s showed alarming levels of asbestos involved in those operations. A 1982 EPA study showed that a significant quantity of asbestos fibers were captured by an air sampler in downtown Libby. The federal agency never followed up.

Grace did take steps to provide respirators for its employees but the workers complained the filters quickly became clogged and unusable. The company also provided showers for the employees and switched the mill operation from dry to wet to reduce the amount of dust in the air.

Internal company memos, which came out in the civil suits that went to trial, showed that early on Grace officials recognized the significant health hazards of the tremolite asbestos that contaminated the vermiculite they were mining.

Nearly 200 local deaths over the past 20-30 years have been linked to exposure to the tremolite asbestos contaminated vermiculite. Subsequently, a series of health screenings conducted by the Agency for Toxic Substances and Disease Registry showed about 1,700 people in the Libby area had a lung abnormality consistent with asbestos-related disease.

In April 2000, Grace began providing a medical health coverage plan for Libby-area asbestos victims. Presently, more than 800 people are enrolled in that plan. In addition, Grace has made a $250,000 annual contribution to St. John¹s Lutheran Hospital. The most recent contribution was made in May.

Benefield said, the grand jury investigation ³brings credibility to what we¹ve been trying to do. It will help bring closure to a lot of families.²