The Center for Public Integrity

The Environmental Protection Agency has diverted $709 million collected from possible Superfund polluters over the past seven years to special accounts, putting hundreds of millions of dollars out of reach of other Superfund sites waiting for cleanup.

Before 2000, all money recovered from companies for site cleanup work performed by the EPA went back to the Superfund trust fund to be spent on cleaning up other sites. But a little-noticed change in agency policy that year allowed cleanup reimbursements reached in settlements to be tucked away into site-specific accounts to be used only for future work at those sites. There are hundreds of these accounts, and the EPA doesn't need Congressional approval to spend the money in them, unlike the Superfund trust fund.

The EPA gave the Center a listing by year of cleanup reimbursements deposited in these site-specific accounts, but declined to provide any supporting documentation. Until the EPA released this information, there were no publicly available documents clearly breaking down cleanup reimbursements, balances in these accounts or how the money is used. The EPA says its internal documents detailing this information can be obtained only through filing a Freedom of Information Act request, which the Center has done.

The EPA Inspector General's office, which has criticized the agency for holding all of these funds in special accounts longer than needed, is currently reviewing how the money is managed. Other federal oversight agencies also are scrutinizing the accounts.

At least three companies linked by the Environmental Protection Agency to hazardous waste sites are being paid by the government to clean up their own sites, according to an investigation by the Center for Public Integrity.

While the EPA did not make all of its procurement records available, the Center found that the agency awarded contracts to Lockheed Martin Corp., Halliburton Company and a subsidiary of Tyco International Ltd. to work on four Superfund sites where at least one company was involved as a "potentially responsible party," according to EPA documents.

The Center sent the firms copies of EPA documents showing the connections, and all three confirmed that each was possibly responsible for pollution at one site, and in one case at two sites. In all cases, other companies also are connected by the EPA to the sites as possible polluters.

The EPA said it is on the lookout for conflicts of interest. "As a regulatory agency, EPA has adopted a very strong position on conflicts of interest and monitors conflict issues both before and during contract performance and takes appropriate action as necessary," Jennifer Wood, an EPA spokeswoman, said in a written response to the Center.

Most regional EPA records not made availableBut environmental watchdogs say that this practice deserves more scrutiny. "It doesn't seem right to allow a company that polluted some site to then secure contracts that would earn them money from the taxpayers to clean up the same mess," said Tyson Slocum, director of the energy program at Public Citizen, a nonprofit public interest group.

Four companies connected by the Environmental Protection Agency to some of America's worst toxic waste sites have escaped more than half a billion dollars in pollution cleanup costs by declaring bankruptcy, potentially passing the tab onto taxpayers.

A Center for Public Integrity analysis of court documents shows that these four companies included on the EPA's list of 100 companies connected to the largest number of Superfund sites could have owed the federal government about $750 million to clean up their sites.

The Center learned of the bankruptcies while profiling the EPA's list of companies connected to the largest number of the 1,623 toxic waste sites ever included in the Superfund program. Superfund was launched in 1980 to identify and supervise the cleanup of America's most toxic and polluted areas.The government, however, apparently received less than $20 million in bankruptcy court.  Another company connected to 30 sites is still in bankruptcy proceedings.  In addition, the government never filed a claim against another company in bankruptcy, although it was linked to 24 Superfund sites, according to EPA data.

The six companies that have filed for bankruptcy are connected to roughly 120 Superfund sites in 28 states, according to a Center study of EPA data.

Through the bankruptcy process, an insolvent individual or corporation can in many cases get a "fresh start," discharging some or all of their previous debts for a fraction of what was owed. Certain types of debt receive priority under the bankruptcy laws, including "secured claims," for which the debtor had mortgaged property or pledged other collateral. Only if there are enough assets to pay those debts in full do general "unsecured creditors" receive any payment.

Communities across America face a daunting threat from hazardous waste sites — some near neighborhoods and schools — 27 years after the federal government launched the landmark Superfund program to wipe out the problem, a Center for Public Integrity investigation has found.

Initiated in 1980, Superfund is desperately short of money to clean up abandoned waste sites, which has created a backlog of sites that continue to menace the environment and, quite often, the health of nearby residents.

Nearly half of the U.S. population lives within 10 miles of one of the 1,304 active and proposed Superfund sites listed by the Environmental Protection Agency, according to the Center's analysis of these sites and U.S. Census data of the 2000 population.

In its investigation, the Center reviewed data, obtained from the EPA through more than 100 Freedom of Information Act requests, and interviewed dozens of experts inside and outside the agency, which administers Superfund.

Among the findings:

How we did it

During the summer of 2006, researchers for the Center for Public Integrity obtained a draft document marked “Enforcement Confidential” from the Environmental Protection Agency, titled “Top 100 PRPs Based on Number of Sites At Which They Are Involved.”

The document, dated December 2001, listed many of America’s Global 500 companies and their connections to hundreds of sites identified by the EPA’s Superfund program — a law passed in 1980 requiring the government to find and supervise the clean up of America’s most toxic areas.

In the five years since the list was updated, the number of Superfund sites has changed by less than 5 percent, according to the Center’s analysis — so the companies associated with the majority of them have remained largely the same. Asked why the list had not been updated since 2001, the Center’s source said it was too politically hot to continue work on the project.

The Center picked up where the EPA left off. Because the list contained only the number of sites connected to each company, the Center attempted to identify the specific sites by running thousands of queries through the EPA’s databases and by contacting each of the companies involved. Center researchers were able to draw a more complete picture of the companies that the EPA connects to the most Superfund sites.

The Center also obtained an internal EPA memorandum that discussed improvements needed for the data behind it. One such issue was confusion over parent companies and subsidiaries for the “potentially responsible parties,” or PRPs — the EPA’s term for entities that might be responsible for waste at certain Superfund sites. Another was the challenge posed by the arcane maze of mergers and acquisitions of corporate America — who owns what now and did they own their Superfund liabilities as well.

By every significant measure, the pace of the Superfund program's progress and success in cleaning up the nation's worst toxic waste sites has declined in the past six years — and the decline has sparked a heated political debate.

Several former Clinton administration officials, environmental activists and Superfund experts blame the decline on a shrinking Superfund budget and lack of institutional will in the Bush White House to commit resources and energy to the cleanup.

Bush administration officials, industry lawyers, and other experts, however, say the number of sites being cleaned up has dropped because the easy sites have been done, picked off like "low-hanging fruit," by the previous administration. The ones that remain, according to the Environmental Protection Agency, which administers Superfund, are bigger and more complex and will cost more to fix.

In a yearlong investigation of Superfund, the Center for Public Integrity has found: