Business Week on U.S. Ecology

* On Nov. 25, you ran a letter from Harry J. Phillips Jr., the chairman of American Ecology, complaining that a Business Week story on the safety record of an American Ecology subsidiary was “rife with errors.” On the contrary, the story was accurate and thoroughly documented by our reporter, Eric Schine, through extensive interviewing and research into the record of the subsidiary, U.S. Ecology. The story said the record of U.S. Ecology, the company designated to run the Ward Valley dump for radioactive waste, has prompted concerns among the dump’s opponents because of a long trail of radioactive dumps and lawsuits.

Phillips cited three dumps closed by the states involved and argued that the closings did not involve leakage or safety violations. The evidence shows otherwise.

At Maxey Flats, Ky., state officials reported indications of leaking from the dump as early as 1974. The U.S. Environmental Protection Agency and its officials commented on leakage numerous times until the dump was closed down in 1977, after U.S. Ecology notified the state of leakage. A chronology of events in the opinion and order of U.S. Ecology vs. Kentucky, a suit filed in the U.S. District Court in Frankfort, is just one of the documents showing that the site was closed due to environmental problems, contrary to Phillips’ assertion. Phillips also disputes our assertion that the cleanup at Maxey Flats could cost up to $100 million. While the EPA estimate is only $34 million, the higher estimate was made by Kentucky, cited in U.S. Ecology vs. Kentucky.

At Sheffield, Ill., there is no dispute over the fact that the suit brought by Illinois was to cover the costs of custodial care. What custodial care involved, however, was containing the radiation that had been detected leaking from the dump’s burial sites. In fact, as part of a 1988 agreement with the state, U.S. Ecology expanded the 20-acre site by another 170 acres to create a buffer zone for the leaking radioactivity. As the state Department of Nuclear Safety concluded in a 1992 report provided to us by U.S. Ecology itself: “Some radioactive materials are moving away from the site, but the vast majority of this movement is being contained within the buffer zone that surrounds the site.” Our interviews with former state officials confirmed that the leakage led to the closing.

At Beatty, Nev., Phillips asserts that the dump was closed only once for safety violations. We count three other instances. Two were in 1979, documented, among other places, in a 1984 letter from Nevada to the state of North Carolina, which considered, then rejected, U.S. Ecology as a candidate for a hazardous waste incinerator. In its October, 1979, summary suspension order closing the Beatty dump, the Nevada Department of Human Resources cited “ten (10) allegations of mismanagement” by the company and referred specifically to the discovery of radioactive material buried outside of designated areas as “an indicia of gross corporate mismanagement.” The documents we reviewed showed a continuing list of problems at the site until recent years. In regard to the closure of the dump earlier this year, Phillips cites the quote in our story from Nevada Gov. Bob Miller referring to the volumes of waste going into the dump and concludes that safety considerations were not a factor. The volumes of material going into the dump, as well as the way U.S. Ecology ran the place, were health and safety concerns for Gov. Miller, and he specifically told us so.

Our story on the Ward Valley site and U.S. Ecology involved extensive preparation, including interviews with company executives and California officials who are satisfied with the company’s record. We stand by the story’s accuracy and fairness.

G. DAVID WALLACE

Assistant Managing Editor

Business Week, New York