Being a dogged bloodhound on polluters' trails, environmental activist Chip Ward said he smells a rat in Magnesium Corporation of America's stated reasons for filing Chapter 11 bankruptcy.
MagCorp, the world's third-largest producer of magnesium at its Tooele plant on the Great Salt Lake, announced in a press release Friday it was joining parent company Renco Metals Inc., of New York, in petitioning to reorganize under Chapter 11.
Filing in U.S. Bankruptcy Court for the Southern District of New York, MagCorp said it was unable to meet its long-term debt because of "liquidity problems arising primarily from price pressures created by foreign imports."
MagCorp spokesmen stressed it was not going out of business and said the bankruptcy filing would have no immediate effect on job status, pay or benefits for approximately 500 employees or other operations at the facilities.
At the same time, the company decried magnesium-dumping by foreign imports, calling them "unfair and illegal."
However, MagCorp, long labeled among the country's worst industrial polluters, has been under fire from the Environmental Protection
Agency for excessive chlorine emissions, among other problems — facing approximately $900 million in fines and penalties from an EPA lawsuit.
And Ward, of Citizens Against Chlorine Contamination, said he wonders whether bankruptcy might be a ploy by which MagCorp could duck the EPA's wrath.
"I'd like to believe it is evil foreigners dumping magnesium that is causing all of MagCorp's (financial) problems, but you have to at least ask whether that passes the smell test," said Ward, author of "Canaries on the Rim: Living Downwind in the West."
"If I'm the EPA, and I hear they've filed Chapter 11, I'm thinking pretty hard. I mean, how would you feel if you'd fined a corporation these huge amounts and now they say they can't pay their debts?" Ward said.
"I assume this is a strategic move by them, and I assume it will play itself out."
Teryl Hunsaker, Tooele County Commission chairman, on the other hand, vigorously defended MagCorp. He blasted environmental activists, claiming overzealous watchdogs were wreaking possible economic havoc on his county.
"We have 500 jobs, plus or minus, that we stand to lose if they totally close down. It's going to hurt our county like hell if all these guys keep it up with these tighter and tighter restrictions," Hunsaker said.
Hunsaker lumped MagCorp and another Tooele company, Envirocare, a radioactive waste-storage specialist, as unfair environmentalist targets.
"l don't have any doubt there is a need to clean up some at MagCorp, but the pendulum never stays in the middle where it belongs," Hunsaker said. "It always has to swing from one extreme to the other. If we lose MagCorp and Envirocare, companies that perform technically safe operations, who clean up our lifestyles and make our lives better, and put all this pressure on them, they will go out of business.
"And if they do, I ask you, who's going to feed Tooele?"
Ward scoffed at MagCorp's perennial crying-poor as a threat it holds over the community and pointed with considerable relish to the company's owner, New York billionaire Ira Rennert, building a whopping mansion on the Long Island shoreline.
"This corporation has been holding this thing about going under and losing jobs over the county's head to keep them in line — and it's been pretty effective," Ward said.
"But then you see all the money Rennert goes through building a house that's supposed to be twice as big as the White House. And he's saying his company's going broke?
"When you start painting the face of Ira Rennert on the side of MagCorp, a lot of its arguments begin to go away," Ward said.
There seems to be general agreement MagCorp is attempting to do a far better job of cleaning up its act, although it has plenty of ground to make up considering its history.
Its decades-old "I.G. Farben" process of taking water out of the Great Salt Lake and separating magnesium from the chloride was pumping an estimated 119 million pounds of chlorine into the atmosphere in 1989, Ward said.
"It was terribly inefficient and terribly dirty," Ward said. "MagCorp traditionally has produced 80 percent of the source-point chlorine gas emitted in the United States."
MagCorp updated to a "sealed-cell" operation and in 1999 had reduced chlorine and other emissions down to 47 million pounds, still too high for the EPA's liking.
The agency also was unhappy with what it described as MagCorp's routine of dumping solid wastes containing dioxins into unlined ditches and a 400-acre pond near the plant.
Such actions consistently have placed MagCorp at the top of the EPA's Toxic Release Inventory.
"MagCorp has been the No. 1, 2 or 3 polluter in the country for years," Ward said.
Now, however, MagCorp is investing in new "multi-polar" technology, which it said Friday would continue despite the Chapter 11 filing. This system, it states, will cleanse 95 percent of the chlorine emissions out of its stacks.
"They're spending millions and millions and they've made things far better," Hunsaker said. "You used to drive over there and you couldn't open the car door, the odor would knock you back. But now it smells fresh and clean, and they should get credit for that."
"The new system will be a great improvement, no question," said Ward. "It also will make them more efficient and more competitive in the marketplace. For instance, the new system should save them a huge amount on electricity.
"But we've had to watch every step of the process to get to this point," Ward said. "Polluters never admit they were pushed. They always say they were getting there anyway. But they never do unless someone watches them and insists on it."
E-mail: gtwyman@desnews.com