Part two: Confusion abounds about N-waste

For more than a decade, radioactive waste giant Envirocare of Utah has been the biggest, and some say the baddest, dog on Utah's political block.

Using a combination of high-powered political lobbying, hefty political contributions and shrewd philanthropy, Envirocare and its owner, Khosrow Semnani, have been virtually untouchable on Utah's Capitol Hill. Attempts to raise taxes and fees on its low-level radioactive waste were deflected with routine consistency; license modifications to take hotter waste were granted with little fanfare, and would-be competitors were all turned away.

But a series of political, financial and legal setbacks over the past year have tarnished Envirocare's image of invincibility, and that has some wondering whether the big dog has finally lost its bite.

Although inconceivable five years ago, could Envirocare be headed to the scrap heap?

"We're doing fine as a company," insists Envirocare President Ken Alkema, "but not as well as we expected. We're down about 20 percent."

But that comment came just days before a group of well-heeled lobbyists, business leaders and advocates for education and the poor announced plans to spend $1 million on a petition drive that would place on the ballot a proposal to raise Envirocare's taxes from 10 cents per cubic foot to a minimum of $20 per cubic foot (a 2,000 percent increase), and as much as $150 per cubic foot. And, it would bar Envirocare from accepting "hotter" wastes, a move the company is trying to pursue so it can remain viable in the waste business.

The measure, advocates say, would tax Envirocare to the tune of $200 million each year, money that would go to education and programs for the poor. The company says it would, pure and simple, drive them out of business.

Envirocare will undoubtedly spend millions opposing the initiative, but even that might not be enough to sway a public that has consistently seen little difference between the low-level radioactive wastes dumped at Envirocare and the unrelated high-level nuclear waste that power companies want to ship to Goshute tribal lands just southeast of Envirocare's facility in remote Tooele County.

The public perception, whether it reflects confusion as to what the Envirocare waste is or a general opposition to radioactive waste of any kind, prompted Envirocare last summer to drop plans to expand its facility to accept hotter radioactive wastes.

The petition supporters capitalize on the public's perception by using hot-button words like "nuclear waste" to describe Envirocare's waste, even though most of the waste consists of uranium mill tailings and soils contaminated with small amounts of thorium.

Shifting fortunes?

The petition drive is the latest in a yearlong series of setbacks for the company.

In February 2001, state lawmakers imposed a 10-cent-per-cubic-foot fee on waste going to Envirocare, as well as additional gross receipts taxes ranging from 5 to 12 percent, depending on the type of waste. Those fees could raise $5 million to $10 million more for the state, an amount critics say is insignificant. The fees may also be symbolic of lawmakers' new-found eagerness to look at Envirocare as a revenue source. (Soon after, the company fired its lobbyists.)

In June, Envirocare found longtime political allies pressuring the company to drop its plans to store Class B and C wastes that are up to thousands of times more radioactive than the Class A wastes the company now accepts. Lawmakers warned there were not enough votes in the current political climate to give Envirocare formal approval it needed to accept the hotter wastes.

The much-publicized extortion trial of Larry Anderson, the former state regulator over Envirocare, detailed how Semnani paid Anderson $600,000 in cash, gold and real estate, ostensibly for regulatory approvals. Anderson was convicted of felony tax evasion charges in September; Semnani had earlier pleaded guilty to misdemeanor tax charges in exchange for his testimony.

In January 2002, Envirocare fired its president, Charles Judd, who was widely respected on Capitol Hill. Judd has said he will sue Envirocare for promises not kept, something critics say could air the company's dirty laundry in a trial that would expose the firm's inner workings to all its competitors.

Envirocare went to lawmakers last month with a request to exempt the federal government from a $1,300 fee charged to all who ship waste to Envirocare. The Army Corps of Engineers has said it would no longer ship certain waste to Envirocare unless the fee is waived, something that could cost the state $500,000 in lost fees. But GOP House leadership weighed in against the bill, and the proposal never even received a committee hearing.

Despite the setbacks, supporters and critics alike agree that Envirocare remains a powerful force on Capitol Hill, as well as in the vigorous world of corporate waste management. But they also agree the days are gone when Envirocare can get whatever it wants with well-placed calls and political contributions.

"I don't get the sense at all that lawmakers feel (Envirocare's) day has come and gone," said Frank Pignanelli, a

former House minority leader-turned-lobbyist who is among those leading the petition drive targeting Envirocare. "With the combination of lobbyists and campaign contributions, Envirocare is as big and as strong a lobby as there is on Capitol Hill."

Power and politics

Indeed, Envirocare has had financial dealings over the years with a who's who of powerful politicos. Former House Speaker and Gov. Norm Bangerter borrowed money from Envirocare's owner. And Bangerter's chief of staff, Reed Searle, later lobbied for Envirocare.

Craig Moody and Rob Bishop, both former speakers, have worked as lobbyists for Envirocare, while former Speaker Mel Brown is a lobbyist for Tooele County, a major recipient of Envirocare's taxes. Former Envirocare lobbyist Nancy Sechrest was particularly close to Brown, setting up office within the speaker's office and influencing House leadership races.

Former Speaker Nolan Karras has been Semnani's financial adviser since 1993, while former Senate President Miles "Cap" Ferry and his wife, Sue, were paid Envirocare lobbyists.

Envirocare critics see questionable doings far beyond the obvious. They point out that attorney Brent Hatch, the son of U.S. Sen. Orrin Hatch, R-Utah, works for Envirocare; they question Semnani's motives in placing powerful Utahns on the boards of his charitable foundations, and they rattle off the scores of lawmakers on both sides of the aisle who have taken campaign contributions.

But some of the criticism stretches reason. For example, House Minority Leader Ralph Becker, D-Salt Lake, has been dubbed a paid consultant to Envirocare.

The truth is Becker, who operates an environmental consulting company, completed one six-month contract for Envirocare in 1990 — six years before he was elected to the House. His firm examined the technical suitability of public lands in Colorado for a low-level radioactive waste dump proposed there by a competitor.

Becker says that experience gave him an eyeful.

"The infighting among waste companies is extraordinary," he said. "The gloves come off and people use whatever means to accomplish what they want. It is a cutthroat business."

He finds it ludicrous that anyone would suggest he was a pawn of Envirocare. Throughout his six-year tenure as a lawmaker, he said he has supported every legislative effort to tighten regulations and impose greater fees on waste companies.

If anything, Envirocare and its president, he said, are guilty of playing aggressive politics and entrenching themselves in the political process through generous giving to both political parties, especially the Republicans. (Semnani is a proud member of the Elephant Club.)

Even critics agree that strategy is not only legal but smart in a state where the GOP holds a two-thirds majority in both houses and the governor's office.

Target: Envirocare

Supporters of the petition drive say that Envirocare's political strategy has resulted in lawmakers' repeated unwillingness to impose significant taxes on Envirocare. That prompted Pignanelli and his lobbying partner, Doug Foxley, who has butted heads with Semnani on Tooele County waste issues over the years, to organize the petition drive, four years in the making.

They brought in the Utah Education Association and an advocacy group for the homeless, cloaking the campaign as an altruistic revenue generator for worthwhile causes with broad public support.

But the target is clearly Envirocare, the only radioactive waste company in Utah regulated by the state. And if Envirocare goes out of business, so be it, petition supporters say.

UEA President Phyllis Sorensen calls the measure a "win-win" for petitioners. If Envirocare doesn't go out of business, the state raises $200 million a year, most earmarked for education. If it does go out of business, then the state is no longer a dumping ground for the lion's share of the nation's low-level radioactive waste.

Alkema said there is only one purpose behind the initiative, to drive the $100 million-a-year company out of business, something that would cost Tooele County and the state about $5 million each every year, not to mention 400 lost jobs.

"It is a cruel hoax to let people think they will get all this money when it really will cost jobs and cost revenues," he said.

The measure may turn out to be far more than fees on radioactive waste. Rather, it may become a fight between the Republican establishment on Envirocare's side and Democrats on the other.

The petition drive has enlisted the support of prominent Utah Democrats, including former Gov. Cal Rampton and former first lady Norma Matheson. Pignanelli and lobbyist Roger Tew, a former tax commissioner, are also prominent Democrats.

In addition, UEA has long been chastised by GOP lawmakers for its support of Democratic candidates.

GOP lawmakers wonder if the petition drive — loathed by many as a way to circumvent the Legislature — might backfire if it becomes partisan. And if it fails, lawmakers will become even more entrenched in their opposition to greater fees on radioactive waste.

Even Republican lawmakers, including Rep. Jeff Alexander, R-Orem, who sponsored the 2001 legislation that would have imposed much greater gross receipts taxes on Envirocare, worry that a failed initiative could damage efforts by the majority to raise additional revenues from waste coming to the state. And there is growing support among Republicans for higher fees.

Alexander said it is not uncommon for bills like fee increases to fail the first time through, but over time and through "tweaking" they often eventually get passed.

But Envirocare's critics say the company is so entrenched in state politics that day will never come, and only by going around the Legislature will the company be forced to pay its fair share for the burden of Utah hosting radioactive waste.

When the Legislature killed the last Envirocare fee increase last year, Sorensen said the referendum became the only option.

"Our intention isn't to put Envirocare out of business," Sorensen said. "It's about the whole state of Utah becoming a dumping ground for radioactive waste and what benefit the state is seeing when it takes on that risk."

Until the initiative passes, if it does, Envirocare remains a big dog, perhaps an angry one, that could turn the petition drive into a junkyard fight.

"The last thing anyone should do is underestimate Envirocare or Semnani," said one former Envirocare lobbyist.

Part two: Confusion abounds about N-waste


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