Allied Chemical Corp. will offer to create a huge Enviromental fund to combat Kepone contamination and possibly other enviromental problems in Virginia, sources here said today.
Allied is expected to submit to a federal judge here Friday a plan aimed at reducing the record $13.24 million fine imposed on the company last Oct. 5 for illegal discharges of the pesticide kepone and other chemicals into the James River and its tributaries.
In imposing the fine, U.S. District Court Judge Robert R. Merhige said he would consider reducing the fine, the largest ever imposed in a criminal pollution case, if Allied came up with "voluntary" plans to help lessen the effects of Kepone. Allied had pleaded no contest to 940 counts of polluting the river over a three-year period.
Sources said Allied is ready to propose the formation of a citizens' group that would help determine how money would be spent in fightin Kepone pollution and possibly on other enviromental issues. Although officials developing the court plans and officials of the corporation had no comment today, it is known that about plans by which it could apply millions of dollars to helping Virginia recover from kepone damage.
According to one source, the plan at that time was to "empower" a group of citizens "with responsibility of protecting the enviroment." Such a group, the source said, might be named as trustees by the court of the fund Allied would put forth. Sources said other individuals or organizations might back the group once it were established. It might have a tax-exempt status.
The citizens' group proposal reportedly does not involve any trade off with Virginia state officials, with whom Allied has been negotiating for months. Sources said the plan does not insure that the state will drop its $3.5 million lawsuit against the company to discuss further Kepone relief with the firm.
In related developments today, the former officers of the defunct Life Products Company of Hopewell, Va., which produced Kepone for Allied in 1974 and 1975, have asked Judge Merhighe to drop or reduce their fines.
William P. Moore and Virgil Hundtofte were each fined $25,000 on Oct. for their part in the Kepone pollution case.
In papers filed here today by his attorneys, Moore called on Merhige to suspend his sentence, claiming he was "completely rehabilitated." Moore's attorney said his client has "suffered financial hardships since his sentencing" and that he was "utilizing his best efforts to assist with a solution to the Kepone problem."
Hundtofte's motion asked the Court to reduce his fine. According to court papers. Hundotfte's youngest child has gone through "a serious illness." The former manager of the Life Science Plant, like his partner, said he was willing to assist in solving the Kepone problem, and also claimed to be rehabilitated.
U.S. Attorney William B. Cummings was not aware that either motion had been filed. But he said Judge Merhige gave each man up to five years to pay his fine, and that "not enought time has elapsed to see what the hardships are . . . I think the public would rise up in arms if these two men got off scot free."
Judge Merhige, who suspended jail terms for the two, is studying the men's request.
Meanwhile, one of the attorneys for the former Life Science workers and members of their families who settled out of court with Allied, have disputed Allied's statement that the settlements did not amount to much. The attorney said the settlements amounted to "a substantial percentage of $100 million" and that one of the victims received $300,000.