Judge dismisses portion of Grace conspiracy charge

By BRENT SHRUM Western News Reporter

A federal judge in Missoula has dismissed a portion of a conspiracy charge against W.R. Grace and seven company officials under the statute of limitations.

While Judge Donald Molloy's June 8 ruling represents a partial victory for Grace, another defense motion to dismiss the conspiracy charge altogether was denied.

The conspiracy is alleged to have occurred between 1976 and 2002. Molloy dismissed the portion of the charge that alleges Grace and individual defendants Alan Stringer, Henry Eschenbach, Jack Wolter, William McCaig, Robert Bettachi, Mario Favorito and Robert Walsh conspired to violate the Clean Air Act and endanger others by knowingly releasing asbestos into the air. The defendants are still charged with conspiring to defraud the federal government by impeding the efforts of regulatory agencies including the Environmental Protection Agency and the National Institute for Occupational Safety and Health.

The defendants argued in their motion that the "knowing endangerment" portion of the indictment, handed down in early 2005, did not allege the necessary overt acts within the five-year statute of limitations. Federal prosecutors countered that acts of concealment after 1999 furthered both the defrauding and endangerment portions of the conspiracy.

"In this case, the defendants have the better argument," Molloy wrote in his order.

Molloy concluded that prosecutors' arguments regarding Grace's failure to abate asbestos-contaminated material on the grounds of Libby schools and to disclose information regarding contamination to EPA officials in 1999 and 2000 did not support the requirement that the acts were undertaken to further a conspiracy to endanger others.

"It is true that one effect of the obstruction was to prolong the alleged ongoing risk of exposure to tremolite, but the mere fact that an act will result in continued danger does not mean the act was done with the purpose of prolonging the danger," he wrote.

Instead, Molloy found it "more plausible that the acts alleged were done in furtherance of the defrauding object."

In the second order, Molloy ruled against the defendants' request to dismiss the entire conspiracy count on the grounds that the federal government waited too long after the alleged offenses to issue an indictment, thus violating their Fifth Amendment rights to due process. They argued that the delay resulted in the loss of potentially helpful witness testimony through death and erosion of memory.

The defense motion contended that the government could have filed conspiracy charges much earlier based on the defendants' alleged efforts in the early 1980s to dissuade NIOSH from conducting an epidemiological study of workers at Grace's Libby vermiculite mine and to delay the disclosure of an animal study on the effects of asbestos associated with the mine from 1983 to 1992.

Molloy found that Grace's efforts to obstruct the NIOSH study and its late release of the animal study "would not have formed the basis of a good-faith indictment alleging conspiracy" prior to EPA's involvement in Libby starting in late 1999.

"Such a basis did not exist until the EPA's cleanup in Libby, during which millions of pages of internal Grace documents were disclosed to the government for the first time," he wrote.

Molloy also found the defendants' claim that valuable witness testimony had been lost to be "speculative," and without proof that any of the witnesses listed in the motion would have helped their defense. In the case of the deceased Earl Lovick, who served as a manager at the Libby mine from 1968 through 1983, Molloy noted that federal attorneys countered that his testimony would further their case and that if he were still alive they would call him to testify for the prosecution.

Molloy has not yet ruled on defense motions to delay the start of the trial — scheduled for Sept. 11, 2006 — and to hold separate trials for the individual defendants. Those issues, along with the motions on which Molloy ruled last week, were argued in a May 17 hearing.

Defense attorneys asked to postpone the scheduled trial date by at least four months, arguing that their clients' rights to due process and effective assistance of counsel have been jeopardized by the government's non-compliance with court deadlines and by the enlargement of the trial far beyond its original scope.

Attorneys for the individual defendants have all filed motions for separate trials. Some defendants are holding that evidence of their innocence is contained in communications with Grace legal counsel that the company asserts is protected by attorney-client privilege. Others are arguing that their involvement was limited in time frame and scope and that they would be unfairly subjected to potential "spillover" from damaging testimony relating to other defendants.

In addition to conspiracy, the company and the individual defendants face various other charges including Clean Air Act violations and obstruction of justice.

Grace operated the vermiculite mine near Libby for 27 years, shutting down in 1990.