W.R. Grace, Former Executives Acquitted in Mont. Asbestos Case

By David S. Hilzenrath and Carrie Johnson
Washington Post Staff Writers
Saturday, May 9, 2009

Chemical maker W.R. Grace and three former executives were acquitted yesterday of charges that they knowingly exposed residents of a small Montana mining town to asbestos over many years and concealed the deadly threat.

The jury, which received the case Wednesday, returned its verdict yesterday morning, quickly dispensing with the government's long-running effort to hold Grace criminally responsible for high rates of lung disease in the mountain community of Libby.

Controversies about evidence loomed large over the case. The federal judge presiding over the trial in Missoula barred prosecutors from using much of the evidence they hoped to introduce, and the government apologized for withholding evidence from the defense.

Complaints of misconduct in the Justice Department's handling of the case echoed similar allegations in the recently dismissed ethics conviction of former senator Ted Stevens, the Alaska Republican.

Grace, based in Columbia, said the acquittal could help it emerge from bankruptcy court, where it sought protection eight years ago from asbestos-related claims.

"Today's verdict removes a major uncertainty in Grace's Chapter 11 case," company spokesman Greg Euston said, adding that the company expects to emerge from bankruptcy by the end of the year.

Fred Festa, Grace's chairman and chief executive, said that, in its stewardship of the Libby mine, the company "worked hard to keep the operations in compliance with the laws and standards of the day."

Beyond thanking the jury, Justice Department spokesman Andrew Ames said the prosecution declined to comment because a former Grace lawyer is still awaiting trial in the case.

Those found not guilty yesterday were former company executives Henry A. Eschenbach, Jack W. Wolter and Robert J. Bettacchi. Last month, the government dropped charges against two other Grace defendants, William J. McCaig and Robert C. Walsh.

The government has spent millions of dollars trying to clean up the contamination in Libby, which has been declared a Superfund hazardous waste site. The prosecution contended that Grace knew it was poisoning the people of Libby, including its own workers. Grace covered up the truth to protect profits and avoid liability, the government charged.

"They have gotten away with murder," said Libby resident Gayla Benefield, who suffers effects from asbestos exposure and lost both parents to asbestos-related diseases, the Associated Press reported.

The defense accused the government of failing to turn over evidence that would have undermined the credibility of a key prosecution witness. At issue were e-mails between the witness and members of the prosecution team. In court papers, the Justice Department called its lapse "inexcusable."

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