W.R. Grace & Co. said yesterday that the company and several current and former senior-level employees are targets of a federal grand jury investigation in Montana stemming from its past mining activities there.
In a news release, the Columbia-based supplier of construction chemicals and building materials said it believes that the criminal investigation concerns "possible obstruction of federal agency proceedings, violations of federal environmental laws, and conspiring with others to violate federal environmental laws" involving a mine in Libby, Mont.
The company's mine, closed in 1990, produced vermiculite, a mineral used for insulation and gardening. Problems surfaced nine years later, when the Seattle Post-Intelligencer reported that nearly 200 people in Libby had died over 40 years from ailments likely caused by tremolite asbestos, a toxic form of asbestos released by mining for vermiculite.
In 2001, the Environmental Protection Agency sued Grace in U.S. District Court in Montana, seeking costs from the government's cleanup of the mine. In August 2003, the court ruled against Grace and ordered it to pay $54.5 million, along with future costs. The company has appealed.
Grace has faced thousands of asbestos-related lawsuits from past production and use of its products, which led it to file for Chapter 11 bankruptcy protection in April 2001, but this is apparently the first criminal investigation. The company said the past and present employees targeted in the investigation were associated with its construction products business.
Company officials declined to comment yesterday. A company news release said, "Grace 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."
News of the investigation pleased environmental advocates in Montana. "I am hopeful that W.R. Grace will now be held to account for its crimes rather than just face civil liability," said Jim Jensen, the executive director of the Montana Environmental Information Center.
The investigation is the latest in a string of legal problems for Grace, a 150-year-old company with more than 6,000 employees worldwide. By the time Grace filed for bankruptcy protection in April 2001, it had received more than 325,000 asbestos-related personal injury claims, paying $1.9 billion to manage and resolve some of the litigation. The company also was the subject of the book and 1998 movie "A Civil Action," which depicted Grace as a corporate polluter of water in Woburn, Mass.
Grace is currently the defendant in 65,656 asbestos-related lawsuits, according to the company's recent Securities and Exchange Commission filings.
W.R. Grace shares closed yesterday at $10.72, up 7 cents.