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Despite lone inspector’s efforts, persistent haze envelops Iowa town

Company appeared to comply with Clean Air Act while exposing citizens to toxics, documents show

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The Grain Processing Corp. plant in Muscatine, Iowa.

Chris Hamby/iWatch News

MUSCATINE, Iowa — One spring day in 2010, the haze hanging over this Mississippi River town was worse than usual. It billowed from the smokestacks of a corn processing plant and blanketed the neighborhood across the street. It enshrouded homes and, seen from a certain angle, looked almost blue.

Kurt Levetzow watched from his car. An inspector with the state agency that enforces air pollution laws, he’d been fielding more and more citizen complaints lately about Grain Processing Corp., known as GPC.

The company’s plant sits on the edge of the town’s South End neighborhood, where black soot and bits of corn collect on cars and homes and many residents worry about what they’re breathing. Even on an ordinary day, a pungent burnt-corn odor hangs in the air, and the haze can be seen from miles away.

But Levetzow hadn’t seen anything like this. Driving through the neighborhood near the plant, he snapped pictures and took notes for the memo he would write. “I went through Muscatine on 3-26-10,” he wrote. “I was amazed at what I saw.”

A pickup truck came to a stop next to Levetzow’s car. It was a company security guard.

“Is there a problem?” the guard asked.

“Yes, there is,” Levetzow answered. “GPC is fogging that residential area with a blue haze.” Levetzow pointed. “You see what I mean?”

The guard looked over. “Ah, they’re getting used to that,” he said, chuckling.

Many communities have had little choice but to get used to it. As the Center for Public Integrity’s iWatch News has reported, hundreds of communities are beset with chronic air pollution involving toxic chemicals Congress intended to rein in years ago. Here in the heart of the Corn Belt, people endure the consequences of a regulatory system that has failed them for years.

The plant’s troubles are well-known to state and federal officials, but fixes — when they have come at all — have been slow. Memos, reports and thousands of emails obtained by iWatch News detail Levetzow’s efforts, the company’s resistance and the state environmental agency’s passivity. They also highlight gaps in a regulatory system that relies on a self-reporting honor system, spotty monitoring and ambiguous rules.

Officials at the state Department of Natural Resources, known as the DNR, have allowed GPC to avoid improvements that would reduce pollution. Even when Levetzow told his bosses he thought GPC’s apparent compliance with air pollution laws was a façade and repeatedly urged them to act, they did little, emails show.

The company says it stays within the limits outlined in its permit, has followed air pollution rules and is upgrading pollution control equipment as part of a major plant improvement project, some of which is scheduled to be finished in 2014. The improvements — some required by a court order resolving a case brought by the state for environmental violations five years ago — still may fail to keep the area in compliance with air quality standards, the state says.

GPC spokesperson Janet Sichterman said other companies share responsibility for Muscatine’s air quality problems, and GPC is doing its part to clean up the skies. “We want this to be a great community with quality air, too,” she said.

While the Clean Air Act delegated enforcement duties to the states, the U.S. Environmental Protection Agency keeps tabs on state agencies and sometimes steps in. The plant appeared on the September version of EPA’s internal “watch list,” which includes serious or chronic violators of the Clean Air Act that have faced no formal enforcement action for nine months or more. GPC was not on the list in October.

Now, after years on the sidelines, the EPA has started to get involved. The agency says it is conducting an ongoing criminal investigation of GPC — a rare step the EPA usually reserves for companies it feels have knowingly violated the law. In December 2009, a team of investigators led by the EPA raided the plant and seized documents. Sichterman said the company doesn’t know why it’s being investigated but is confident the probe will determine GPC followed all laws.

Some residents, no longer content to wait for official action, are organizing and building their own case. They are filing complaints and documenting health problems. Recently, they hired a lawyer. As in other communities, they face significant hurdles, from limited air monitoring and health studies that would help them make their case to wariness among their neighbors about taking on powerful political and economic forces.

Even if the investigation and the company’s planned improvements bring change, some residents worry cleaner air may come too late. “Every day it seems like it’s getting worse,” said Wanda Mansaray, who grew up in the South End and said she wears a mask when working in her yard. “How long’s it going to take before they say, ‘We’ve found something irreversible in your lungs we can’t fix’? ”

‘Perfectly legal’

Muscatine-based GPC, a privately owned company with the motto “where innovation comes naturally,” has more than six decades of history in the town known as the “Pearl of the Mississippi.” Each day, the plant transforms the area’s staple crop into beverage alcohol, ethanol and the syrups and starches that make sports drinks sweet and granola bars chewy.

But those living in the plant’s shadow, particularly in the working-class South End neighborhood, worry about its other products: the gases and small particles shooting from its stacks.

Last year, the plant released more lead — a toxic metal that can damage the nervous system — than any plant in the state, according to DNR data. It emitted more acetaldehyde — a probable carcinogen chemically similar to formaldehyde — than almost any plant in the country, EPA data show. Blue haze can indicate the presence of compounds such as acetaldehyde.

State officials began a study of toxic emissions from the plant last year after discovering that GPC appeared to have underreported in submissions to the EPA, said Catharine Fitzsimmons, head of the department’s air quality bureau. But the study is suspended, Fitzsimmons said, so DNR can focus on a higher priority: reducing emissions of fine particles in Muscatine to avoid a designation by the EPA – nonattainment of a Clean Air Act standard – that could jeopardize the area’s economic future.

Near the plant, siding is speckled, and satellite dishes once white have turned almost black. Residents say they can wash a car one day, then write their name in the black soot on it the next. There has been no health study, but many people complain of health problems — from breathing troubles to cancer. In recent years, the county has had one of the state’s highest cancer mortality rates.

Levetzow, 36, one of Iowa’s more senior inspectors, oversees the largest emitters across southeastern Iowa. To him, it’s  long been clear that GPC has spewed more pollution than allowed. “It seems obvious to me … that they’ve been out of compliance for a long time,” he wrote in a 2009 email to a DNR lawyer. Gathering the evidence — and getting his bosses to act — has been the challenge, emails between him and DNR officials show.

Levetzow’s starting point was what he viewed as a fundamental disconnect: GPC said it was complying with the limits set in its permit, but the obvious haze indicated otherwise. That led to a question he couldn’t yet answer: If GPC had been failing to comply with pollution limits, why had none of the checks set up by the state — monitors, mandatory self-reporting, periodic testing — detected it?

A key development came in October 2008. Union workers who had been locked out by GPC came to DNR, alleging the company used environmental practices that ranged from sketchy to illegal.

Among their allegations: GPC switched between types of coal to fool an air monitor. When Levetzow inspected the plant, he found two piles of coal. One was high in sulfur — a type that releases more sulfur dioxide, the pollutant measured by the monitor. The other, lower in sulfur, was used only sporadically.

GPC does not dispute switching types of coal when the wind was blowing toward the monitor but says it acted to protect public health by keeping sulfur dioxide emissions in check.

Switching between coal sources is “perfectly legal,” GPC’s environmental director, Mick Durham, said in an interview with iWatch News. “People assumed that something was being hidden or we were trying to get out of regulation, but that’s not the case at all.”

The company stopped the practice in the winter of 2009, company spokesperson Sichterman said, because it could be misinterpreted as an attempt to trick regulators. Now it burns only the high-sulfur coal, she said. “You’ve heard the term, ‘No good deed goes unpunished.’ They were doing it as a good deed,” she said.

The EPA may take a dimmer view of the practice, said Fred Burnside, who left the agency last year after serving as head of criminal enforcement and now advises companies and law firms. “That would be a very high-priority case because they’re basically altering the monitor,” said Burnside, who wasn’t directly involved in the case while at the EPA.

While investigating the coal switching, Levetzow found another cause for concern. GPC, it appeared, hadn’t reported a number of instances when pollution exceeded allowed limits. These episodes are generally considered violations of air pollution rules, but in Iowa — as in many states — companies can avoid notifying regulators of the excess emissions under a narrow set of circumstances – for example, when cleaning pollution control equipment.

GPC seemed to clean its pollution control equipment often, state records show. Each quarter, the company submitted a lengthy report of excess emissions, including some it had decided were allowed, citing this exemption. The more Levetzow pressed GPC, the more concerned he became that the company was misusing the exemptions to conceal frequent violations of its permit limits. Officials in the air quality bureau’s main office later told him they agreed that GPC was sometimes claiming exemptions where they didn’t apply, an email from the agency’s top compliance officer shows.

If the company had reported all its excess pollution episodes, regulators might have been able to force improvements. Instead, it looked like GPC was doing what it was supposed to do.

Sichterman said the company has changed its operations and better trained its employees, eliminating the practices that caused some excess emissions. It stopped claiming some exemptions a couple of years ago, she said.

Emails show that some DNR officials believe GPC avoided the practices that led to spikes in pollution during the periodic tests it must run to show compliance, and locked-out union officials made similar allegations in interviews with iWatch News. If true, this would have allowed the company to report less pollution than it was actually releasing. GPC’s Sichterman said the company has never altered its operations during testing.

During the past decade, the state has issued GPC 38 notices of violation related to air pollution, many of them scolding the company for failing to keep monitors in operation at all times or for failing to seek approval for modifications of the factory — types of violations that can make it difficult for regulators to keep tabs on pollution from the plant. Violations resulted in penalties on two occasions, and the company paid a total of $548,000 in fines, DNR officials said.

‘Do we just have to sit back and wait?’

State regulators and GPC agree that one way to significantly cut pollution at the plant would be to hook up pollution control equipment the company already owns. In 2007, the company bought a large building known as a baghouse, which would house filters to capture particles that can cause respiratory problems and carry toxic materials like lead. But GPC has since refused to hook it up, and the DNR has not compelled the company to do it, correspondence between the company and the department show.

The baghouse still sits on the plant grounds — a monument to inaction, and to the wars over regulation 900 miles away in Washington.

GPC bought the equipment to comply with an EPA rule that would have taken effect in September 2007 requiring curbs on pollution from boilers — in GPC’s case, six devices that burn coal to power the plant.

Just months before the rule was to take effect, however, a federal court vacated it, sending EPA back to the drawing board. Four years later, the rule still hasn’t taken effect, and some in Congress want to see it further delayed, saying it threatens jobs.

Companies often complain about the nation’s sputtering regulatory process, saying uncertainty can add to expenses and complicate planning. GPC hasn’t installed the baghouse, Sichterman said, because it’s unclear whether it would meet the requirements of the new rule, whenever it takes effect. If it doesn’t, the cost of modifying it later would exceed the cost of making all the changes at once.

But everything Levetzow had uncovered indicated to him that GPC wasn’t able to keep its emissions in check with the equipment it had — devices many similar plants had phased out years earlier. Emails show he worried about the consequences of waiting for the new EPA rule or for GPC’s planned improvements. In the interim, higher emissions would continue.

For at least a year, he sent emails to his bosses in Des Moines, outlining the problem and what he thought could be done. For instance, the department could require GPC to run tests proving it was staying within its pollution limits. If the company didn’t pass, the department could require GPC to hook up the baghouse, Levetzow suggested.

His bosses did little in response. Levetzow’s emails to them tell the story:

December 2008: “Do we just have [to] sit back and wait?…GPC’s environmental people…agree that the new [baghouse] would more or less do away with the haze that can be seen above GPC and half of Muscatine on any given day, but they’re waiting for someone (new Boiler [rule]) to require them to do it.”

May 2009: “I’ve heard the new [EPA boiler rule] may not come out for 4 more years or so, so that’s a LONG time to allow them to spew all over Muscatine.”

June 2009: “Seems to me, we have all we need right now.”

October 2009: “Am I totally out of line????”

Top officials in the department’s air quality bureau told iWatch News they didn’t recall discussing Levetzow’s concerns. “We didn’t really have any authority to require” GPC to hook up its baghouse, said Brian Hutchins, head of the department’s compliance office. He acknowledged the DNR could have required the company to run tests, as Levetzow suggested, but said he didn’t recall discussion of mandating them.

Over the years, the department hasn’t required GPC to upgrade its pollution control equipment, even as similar plants have modernized. In 1990, the state allowed GPC to avoid added scrutiny of a construction project as long as the company agreed to limit the hours it ran new equipment known as a dryer. The company also closed some gravel roads, in theory offsetting the increase in pollution from its stacks with reductions in the amount of dust kicked up by trucks at the plant.

If the project had added 25 tons of small particles into the air each year, GPC would have been required to analyze potential impacts and possibly install better pollution control equipment. Because the project would result in only 24.4 extra tons, calculations indicated, GPC didn’t have to do either.

It was more than a decade before state regulators discovered that the company had been violating the hourly operating limit for years. GPC paid a $538,000 fine, and many of the improvements the company is now touting are in response to requirements of the 2006 agreement resolving the case.

State officials have since discovered that another expansion of the plant, which also avoided a more rigorous review, “was an error and never should have been allowed” by the state, according to an internal engineering evaluation by the DNR. Testing in 2005 indicated the equipment was releasing pollution at twice the allowed rate, but the state responded by increasing GPC’s limit, again allowing it to avoid a tougher review.

Four years later, the company began using a different fuel in the equipment, and tests conducted by GPC the next year again showed the plant emitted more than twice the allowed level of pollutants.. The department earlier this year asked the state attorney general to pursue a case for this and other violations.

Durham, GPC’s environmental director, said the most recent violations were minor. “There will be some type of fine,” he said, “and we’ll end up paying it.”

This reality irks many residents. “If we don’t have them be accountable for what they’re doing to us, they’re just going to go right on doing it,” said Sherry Leonard, who has lived near the plant for more than 30 years. “And they’re going to pay fines and never stop.”

‘Stirring things up’

Many in Muscatine now are raising concerns about the air they breathe for the first time, but others are wary of challenging political and economic forces in their community.

In 2008, a local politician in the state House of Representatives, Democrat Nathan Reichert, put together a forum where DNR officials fielded questions from his constituents about the town’s air pollution troubles.

“Politically,” Reichert recalled, “it was as if I had stuck a stick in a beehive.”

City Councilman Robert Howard sent a seething complaint to Iowa’s environmental agency. “Eastern Iowa is a bright spot for Iowa’s economic growth and future,” he wrote. “Why would [the department] want to handicap our ability to compete?” And GPC’s Durham complained in an email to Levetzow that Reichert was “stirring things up among the residents.”

In 2010, the business community put its financial support behind Reichert’s Republican challenger; the two largest contributions came from Gage Kent, the chairman and CEO of GPC’s parent company, who gave $5,000, and James Kent, his father and the company’s vice chairman, who gave $10,000.

Roger Lande, who took the helm as DNR director earlier this year, also had contributed to Reichert’s opponent. Lande, whose former law firm represented GPC,  is a former chairman of the Iowa Association of Business and Industry. Two of the eight members of the Muscatine City Council work for GPC.

Though Reichert lost, the attention he called to air quality helped spark a movement that coalesced earlier this year as a group calling itself Clean Air Muscatine. Experts and activists from other Iowa communities have helped the group organize and conduct surveys. Residents are documenting dates, times and what they’re seeing or feeling. They’re complaining to the state and the EPA.

Recently, they hired James Larew, who served as general counsel to former Gov. Chet Culver, a Democrat, to explore possible legal action against GPC. Larew said he couldn’t discuss a potential case, but, in general, he said, “There is a great danger that the regulated community has too much power with the regulators, and as a result the public interest is at risk …My hope is that we can make citizens feel…that they have a seat at the table.”

The company is defending itself publicly and issuing press releases about its commitment to the environment. The planned improvements to the plant – new, more efficient equipment and better pollution control devices – will cost about $100 million, a fact GPC has publicized.

“The company is voluntarily doing this project,” Sichterman said. “That’s part of our effort to be a great corporate citizen.”

Durham acknowledged that some of the improvements are required by the agreement the company signed five years ago — then tried unsuccessfully to have vacated by a judge — to resolve the state’s air pollution case. But the improvements go beyond what is mandated, he said.

GPC predicts significant reductions in air pollution, but the DNR says the planned improvements, still three years distant, won’t happen soon enough and likely won’t go far enough to make sure the area meets EPA standards designed to protect public health.

In July 2010, Richard Leopold, then the director of the DNR, wrote a pointed letter to GPC, asking the company to do more to reduce pollution.

“The citizens living, working and raising families in the vicinity of your facility deserve better than this,” he wrote.

In the 16 months since, negotiations between the state and the company have achieved few tangible results, acknowledged DNR official Fitzsimmons. The haze remains, citizen complaints continue and Levetzow is still taking pictures to document the smoke and ash pouring from GPC’s stacks and over the South End.