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Jury finds Grace not guilty

Asbestos case alleged conspiracy to hide health risks

MISSOULA – W.R. Grace & Co. and three former executives were acquitted Friday of federal charges that they knowingly allowed human exposure to asbestos in Libby, the northwestern Montana town near a mine the company operated from 1963 to 1990.

An eight-count indictment in 2006 charged that Columbia, Md.-based chemical company Grace and several of its one-time executives conspired to hide health risks posed by asbestos in vermiculite the company mined. The indictment also alleged violations of the Clean Air Act and obstruction of government efforts to address problems in Libby.

Attorneys for some Libby residents blame tremolite asbestos for about 2,000 cases of illness and about 225 deaths in and around the community.

W.R. Grace released a statement saying the company was “gratified” by the verdicts.

“We always believed that Grace and its former executives had acted properly and that a jury would come to the same conclusion when confronted with the evidence,” said Fred Festa, Grace chairman, CEO and president.

“During the time that Grace owned and operated the mine in Libby, Montana, the company worked hard to keep the operations in compliance with the laws and standards of the day,” he said.

Still pending against Grace are civil cases in which hundreds of Libby residents seek compensation for health problems.

During the trial, charges against two executives were dropped at the request of prosecutors. The jury acquitted Henry Eschenbach, Jack Wolter and Robert Bettacchi. Another defendant, mine general manager Alan Stringer, died of cancer in 2007. His family said the cancer was unrelated to asbestos. The case of O. Mario Favorito, who was an in-house lawyer for Grace, was severed and is scheduled for trial in September.

“I’m grateful and happy to go home,” Wolter, who is retired and lives in Palm Desert, Calif., said outside the Missoula courthouse after the verdicts.

In the prosecution’s closing arguments two days earlier, Assistant U.S. Attorney Kris McLean said Grace knew about the health hazards of asbestos but concealed them “so they could continue making money as well as avoid liability.”

Allegations of prosecutorial misconduct arose during the trial. At one point, U.S. District Judge Donald Molloy told prosecutors they did not understand the evidence they were presenting.

“The jury has spoken, and we thank them for their service. We are refraining from further comment at this juncture because one individual awaits trial in connection with this case,” said Assistant U.S. Attorney Jessica Fehr, of Billings, a spokeswoman for the U.S. Justice Department in Montana.

Asbestos contamination in Libby led to environmental cleanup and health care services that have become a major economic force in a community once reliant on mining and logging.

Cleanup overseen by the U.S. Environmental Protection Agency has cost tens of millions of dollars. The town at the hub of an area with about 10,000 residents now has a health clinic devoted to asbestos-related disease. Libby has held asbestos “health fairs,” and a local company took up manufacturing backpack-style carriers for oxygen tanks that aid the breathing of people with asbestos-scarred lungs.

Asbestos was dispersed in a variety of ways. Miners brought asbestos home on their clothes, vermiculite was used to cover school running tracks in Libby, and some residents used vermiculite as mulch in home gardens. Grace produced a type of attic insulation that can contain asbestos, and the company agreed to pay millions for settlement of a class-action lawsuit stemming from use of the insulation.

Legal representation and other expenses related to the court case probably have cost Grace “in the range of $50 million a year,” said the firm’s Stephen A. French.


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