‘Secret’ deadly for Montana town saturated in asbestos, prosecutors say

For 27 years, W.R. Grace & Co. operated a vermiculite mine in Libby, Mont., producing bags of puffy white granules that were marketed all over the U.S., perfect for insulating attics and aerating gardens and potting soil.

The trouble was, the vermiculite contained small quantities of asbestos, a cancer-causing fiber that could, even in tiny quantities, fatally lodge itself in the lungs.

The material posed a risk not only to mine workers, but also to those who touched the workers’ clothing or used the high school running track and community ice-skating rink, both built with asbestos-laden mine tailings donated by the company.

That was the Maryland-based chemical company’s “secret,” federal prosecutors alleged Monday as W.R. Grace and five of its former executives went on trial here in a case that environmental law experts describe as the most significant criminal prosecution the U.S. has ever filed against an alleged corporate polluter.

“There’s never been a prosecution in the United States where so many people have been sickened or killed as a result of environmental crime,” said David Uhlmann, formerly the Justice Department’s top environmental-crimes prosecutor and now a professor at the University of Michigan Law School.

Raw vermiculite from Libby was processed at sites around the country, including several California locations -- Newark, Santa Ana, Glendale and Thermal among them. Many of the sites were subsequently found to be contaminated and have become part of the massive wave of lawsuits that forced W.R. Grace into bankruptcy reorganization in 2001. The company last year announced plans to settle the claims.

An estimated 1,200 Libby residents died or developed asbestos-related diseases from the asbestos fibers that permeated nearly every corner of the small town at the base of the Cabinet Mountains, Justice Department lawyers say.

Prosecutors say W.R. Grace officials were secretly armed with studies that documented the dangers but insisted for decades that their product presented no generalized health hazard.

By 1976, the indictment says, the company had data that showed that 63% of all its employees who had worked 10 years or more in Libby had lung abnormalities. Six years later, a Harvard University researcher concluded that an “excessive number” of former W.R. Grace employees had died of lung disease. But his findings were kept under wraps.

“This case is about a company that mined and manufactured a hazardous product, and individual executives that chose profits at the expense of people’s health, and chose avoiding liability over disclosing the health hazard to the government,” Assistant U.S. Atty. Kris McLean told a U.S. District Court jury in opening statements Monday.

The case is a milestone for residents of the town that for decades survived on the mine’s earnings but which now finds itself stricken with its legacy. It is not uncommon to see men and women with oxygen bottles at the grocery store; most families have someone with lung cancer, mesothelioma, asbestosis or sores on their lungs.

“I guess people are just looking for somebody to be accountable for it,” said David Strand, a Libby businessman who has been diagnosed with asbestosis, along with his wife. His father-in-law died of the disease in the 1980s.

“He lived with us the last few years of his life, and you have never seen a more horrible death,” Strand said in a telephone interview.

Yet in defense opening statements Monday, lawyers presented the former W.R. Grace employees on trial -- many of them now in their 70s, who had raised families and coached Little League teams in Libby -- as blue collar managers with little experience in toxics. They say they too were alarmed by the growing evidence of the health threat posed by asbestos, and eager to do whatever they could to protect their employees, neighbors and families.

The company spent millions of dollars to modernize operations and lower workers’ exposure to asbestos to levels far below federal health standards, defense lawyers said. Then, when the company’s health surveys suggested that workers were still falling ill, Grace turned over the disturbing new findings and warned the government that its own standards might need tightening, they said.

“There’s no question that the miners and their families suffered tragic losses as a consequence of the operation of this mine,” attorney David M. Bernick, representing W.R. Grace, told the jury. “But this case requires you to focus on what is it that counts.”

The defense is attacking the charge that W.R. Grace employees conspired to boost profits with the full knowledge that Libby townspeople would be harmed years later by the lingering asbestos. Bernick said the government is overreaching by prosecuting the executives for pollution that occurred decades before the 1990 law making such pollution a criminal act.

The five former executives face up to 15 years in prison and fines of several million dollars if convicted on various counts of conspiracy and violations of the Clean Air Act. Grace’s former legal counsel is being tried separately. The former general manager of the Libby mine, Alan Stringer, originally a seventh defendant, died of cancer. The six remaining employees have pleaded not guilty.

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kim.murphy@latimes.com