89.1 WEMU

The Green Room: The Ann Arbor Area's 1,4 Dioxane Plume-Part 22

Sep 30, 2016

Ann Arbor’s dioxane plume is rather unusual, in that it emanates from just one source. That source is the old Gelman Sciences facility on Wagner Road in Scio Township. Other area's of dioxane contamination around the country, such as  the KL Avenue Landfill in Kalamazoo, have many “Responsible Parties” contributing to the contamination problem. Even with a single source, assigning responsibility for clean-up remains complicated in Ann Arbor.  In this installment of "The Green Room"  we try to untangle the confusing web of who is who when it comes to liability. 


David Fair (DF):  Good morning, I’m David Fair and this is 89-1 WEMU’s “The Green Room.” We continue today with our series on the 1,4 dioxane plume that has contaminated groundwater in, and around, Ann Arbor.  In previous segments, we’ve made clear that court documents refer to “Gelman Sciences, Inc.”  as the legal entity responsible for carrying out remediation.  Outside of court, however, names are used interchangeably for the “Responsible Party.” Those names include Pall, Pall-Gelman, Danaher or even Pall-Gelman-Danaher.  In this installment of “The Green Room,” Barbara Lucas tries to accurately identify the “Responsible Party.”

Barbara Lucas (BL):  After the dioxane pollution was first discovered in 1984, Gelman Sciences claimed the State of Michigan was responsible.  They said the state had sanctioned Gelman’s dioxane discharges.  But the state disagreed, as detailed in court records.  A series of consent judgments ordered Gelman to clean up the pollution.  But that didn’t settle the matter. 

BL:  Chatting with Ann Arbor resident Bob Bailey after a dioxane-criteria meeting, I learn something surprising. Gelman Sciences had pointed the finger at Dow Chemical? 

Bob Bailey:  I’m retired from Dow Chemical Company, where in 1984 or ‘85 Gelman called me about this pollution, asking for a bundle of money.  But I sent them off to administration.

BL:  Why did they want a bundle of money?

Bailey:  Because that was one of the companies that had sold them the dioxane.

BL: Apparently, Gelman claimed Dow failed to inform them that 1,4-dioxane is not biodegradable. The companies settled out of court.  Bailey says Dow gave them the money…

Bailey:  On the condition that they forevermore be out of this problem.

BL:  Chuck Gelman finally did manage to transfer the liability, when he sold the company to Pall Corporation in 1997.  As Pall spokesperson Farsad Fatouhi told Ann Arbor Business Magazine in 2005, Pall had the option to buy only the business without the environmental liability, but chose to buy the liability.  Quote: “After all, we are an infiltration company; cleanup is our job.” But in 2015, the liability traded hands again, when Pall sold to the multi-national Danaher Corporation. 

BL: I’m knocking at the door of the Pall Corporation on Wagner Road.  There’s not much here—a trailer next door to a chain link fence surrounding big metal boxes.  The manufacturing company that once employed hundreds is long gone—only a skeleton cleanup crew remains.  This makes some people nervous, including citizen watchdog Roger Rayle.

Roger Rayle:  So with Danaher, maybe they are going to set it up so they can walk away from that even—then the whole cost and risk will be transferred back to the taxpayers.

BL:  Is that possible?

Rayle:  Sure, GM did it.  They split the company, and the part that is doing the clean up has X-amount of dollars.  When that money runs out, there’s not going to be any more money.

BL:  I thought Danaher was legally responsible. 

Rayle:  Yeah, but they could take Pall, split it into two parts, and you know, the part that is making money, they can still call “Pall,” the other part they can call “The Pall Cleanup,” and give them X-amount of dollars that will supposedly finish the cleanup, based on someone’s estimate—probably the lower of the estimates.  And then in ten or twenty years, whenever that money runs out, then you are left with this spreading plume that someone’s got to take care of.  And who do you think that’s going to have to be?  I mean we are already just twenty or thirty years into this and there's already two companies that have left the scene! Gelman is no longer Gelman, and Pall is really no longer Pall.

BL: What about the line of credit from Gelman Sciences that the State of Michigan holds?  Over $28 million is in the bank for the state to use if the polluter doesn’t fulfill its obligations.  It’s called the Financial Assurance Mechanism.  But Rayle is not assured.  He thinks the amount stashed is paltry compared to the enormity of the task.

Rayle:  And then when that money runs out, costs and risks are going to be transferred back to the public. Whatever shell company is left at that point will just declare bankruptcy and it's going to stuck back to the public.

BL: Ann Arbor Mayor Christopher Taylor is not as concerned that the responsible party might walk away. 

Mayor Taylor:  There’s not a lot of discretion here.  If the case reopens, at some point the judge is going to rule, and that will be the party’s obligation to follow that rule. 

BL:  And if Danaher sells, Taylor says the obligation will be in the buyer’s hands.  OK, so where does the Michigan Department of Environmental Quality think the liability lies?  After all, they’re the government entity that deals with the polluter in court.   Ann Arbor City Councilmember Sumi Kailasapathy asked Robert Wagner, Program Deputy Director of the DEQ. 

Sumi Kailasapathy: So, Danaher is the successor corporation, right?  The 1,4-Dioxane plume is on their balance sheet?

Robert Wagner:  That’s a good question.  It depends on whether you are looking at this from legal liability, or you’re looking at it from business, corporate liability… 

Kailasapathy:  Business.  Corporate liability.  Balance sheet.

Wagner:   Yeah, so… I don’t know what Danaher has listed on their liabilities, for instance on their reporting under federal law.  But if it’s listed, then that would be correct.  I don’t have familiarity with it.

BL:  Hmm… if the head DEQ official doesn’t know… OK, to the horse’s mouth: What is Pall and Danaher’s perspective on their responsibilities?

BL:  Beginning in February of last year, we’ve tried reaching folks in numerous departments at both Pall and Danaher.  All messages go unreturned.  And we aren’t the only ones reaching out with no response.  Recently, Washtenaw County Water Resources Commissioner Evan Pratt tried a different approach.

Evan Pratt:  In a letter that just says “We're writing you because we had a tough time with the last group of folks and never saw them much and it looks like you all are a little more conscious of this.”

BL:  That’s the sentiment behind a September 13th letter to Danaher, which was signed by leaders from the City of Ann Arbor, Washtenaw County and Scio and Ann Arbor Townships. The letter requests an answer by the end of September.  It asks if “Danaher walks the talk of corporate responsibility.”  Indeed, here are highlights from Danaher’s Social Responsibility Report: “Sensitivity to community environmental concerns,” “Purifying the global water supply,” and there’s a spotlight on their Ultra-Violet light method for removing dioxane from drinking water.

Pratt:  Sounds like something they're certainly knowledgeable about.

BL:  Will they step up to the plate and use their extensive skills to purify Ann Arbor’s water supply?  The community awaits a response.

Barbara Lucas, 89 One, WEMU.

Resources:

Interview with Pall's Farsad Fatouhi, Ann Arbor Business Magazine, 2005 

Sept. 13th Letter from local leaders to Danaher Corporation 

Danaher’s Social Responsibility Report  

“Gelman blames chemical producers for damage,” Ludington Daily News, 1988. 

1992 Consent Judgment between Gelman Sciences and the State of Michigan  “Gelman settles lawsuits,” Ann Arbor News, 1992.