Taxpayers may get stuck with big environmental costs, including four Colorado projects, as a result of last week’s bankruptcy filing by Asarco, a smelting company. The case highlights not just Asarco’s woes but also the failure of Congress and President Bush to properly fund toxic waste cleanups.
Asarco, a unit of the Mexican corporation Grupo Mexico, faces liability for dozens of environmental messes around the United States. Wall Street realized that Asarco was teetering and wisely lowered its credit rating.
The Bush administration wasn’t that smart, granting Asarco a sweetheart deal even though the company already was in trouble. In 2002, the U.S. Department of Justice recommended against letting Asarco sell its only major asset to another Grupo Mexico division because the sale could leave Asarco’s creditors (including the U.S. Environmental Protection Agency) holding the bag if Asarco went belly up. Just months later, the Justice Department approved the sale, federal court documents show. Now that Asarco has gone bankrupt, it may unload many of its cleanup costs onto the EPA and states like Colorado.
In 2003, Asarco’s parent firm agreed to create a $100 million trust fund, but this year the fund will pay only $18 million of Asarco’s estimated $1 billion in environmental liabilities. The EPA and state governments will compete for the trust’s limited dollars to cover existing and future cleanups, but there likely won’t be enough cash to fund all the work. Bluntly put, the Bush administration failed to protect either taxpayers or the environment.
What will happen to Asarco’s four Colorado toxic sites – three in northeast Denver and one near Leadville – is unclear. But if they can’t get trust fund dollars, the EPA and Colorado likely will have to ask Congress for tax money to fix Asarco’s ecological messes. The 1980 Superfund law originally taxed the chemical industry to pay for cleansing toxic sites where no companies could be made to foot the bill. The tax expired in 1995 and Congress refused to renew it (indeed, President Bush actively opposed doing so). So today, Superfund is a fund mostly in name only. Each year, the EPA begs Congress for dollars to fix toxic sites, then each project competes for what money is available. There’s not enough cash for all, so projects get shelved.
It’s bad policy that federal law lets corporations shed environmental responsibilities by filing bankruptcy. It’s bad government that Congress and President Bush failed to renew the Superfund tax or appropriate adequate federal money.
