A federal grand jury is investigating
On Aug. 8, Exide received a "grand jury subpoena from the Department of Justice in the Central District of California in connection with a criminal investigation involving its Vernon, California, recycling facility," the company reported in documents filed with the Securities and Exchange Commission.
The subpoena requested "documents relating to materials transportation and air emissions," in an investigation targeting Exide and "certain unidentified individuals," the filing said.
The federal investigation is the latest escalation in a series of troubles for the Vernon battery plant.
Community groups and elected officials have demanded the facility's closure since a March 2013 health study found its arsenic emissions posed an increased cancer risk to more than 100,000 people across southeast Los Angeles County. The plant has been cited repeatedly by environmental regulators in recent years, often for emitting too much lead.
The plant, one of only two lead acid battery smelters west of the Rocky Mountains, has sat idle for months because it cannot comply with tough new rules adopted by local air quality officials in January. The facility can process about 25,000 automotive and industrial batteries a day, providing a source of lead for new batteries.
A statement issued by the Milton, Ga.-based company confirmed "that it has been identified as a target of the grand jury investigation, and that the company intends to cooperate with the investigation."
A spokesman for the U.S. attorney's office in Los Angeles declined to comment. Grand jury proceedings are secret by law.
Under an agreement reached last month with the South Coast Air Quality Management District, the Exide plant may not resume operations until it upgrades its pollution controls to keep arsenic emissions from drifting into surrounding neighborhoods.
Arsenic is a human carcinogen that can cause skin problems and increase the risk of cardiovascular disease and
The federal investigation was welcomed Friday by community activists who have sought to have the plant closed permanently and have demanded an extensive cleanup of airborne lead that authorities believe has been deposited in the soil over many years.
"Hopefully, this is another way to bring Exide to accountability," said Msgr. John Moretta of Resurrection Catholic Church in Boyle Heights. "You have a company that has a whole list of violations and, year after year, they pay a fine and they are allowed to continue working."
The Vernon plant has operated since 1922 and was taken over by Exide in 2000.
Crews hired by Exide on Monday began cleaning lead-contaminated soil from two homes near the plant after tests conducted last fall found elevated levels of the harmful metal in dozens of residences and a preschool in nearby Boyle Heights and Maywood. Also this week, state environmental officials began a two-month project to expand soil lead testing around the plant to at least 144 additional homes across a two-square mile area where more than 60,000 people live.
On Tuesday, Los Angeles County supervisors wrote a letter to Gov. Jerry Brown criticizing as "piecemeal" the testing and cleanup of nearby homes overseen by the California Department of Toxic Substances Control. The state agency has allowed the company to operate for decades without a full permit.
A bill making its way through the state Legislature would require the department to make a final decision on the Vernon facility's hazardous waste permit by the end of 2015 or revoke its "interim status."
Sen. Ricardo Lara (D-Bell Gardens), the bill's author, said in a written statement that "news of this investigation raises serious concerns and seems consistent with Exide's lack of accountability to the communities that have been victims of exposure to contamination and pollution from years of serious violations."
"It's time to establish a hard-line timetable for Exide to bring its facility into compliance or shut down," he said.
Exide, one of the world's largest producers of lead acid batteries, filed for Chapter 11 bankruptcy protection last year.
In the SEC filing, Exide said it may not complete the upgrades required to restart its Vernon plant until the end of March 2015, "should the company decide to proceed."
The South Coast air district has a pending lawsuit against Exide in Los Angeles County Superior Court seeking up to $40 million in penalties. The U.S. Environmental Protection Agency cited Exide in May for a series of lead emissions violations at the Vernon plant.