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Published: March, 2005; Vol 1, Num 10

 

Asbestos Compensation Compromise
Remains Elusive

Despite much early fanfare, Senator Arlen Specter's (R - PA) February 1 guidepost for presenting a revised asbestos victims compensation bill to the full Senate passed without further ado. Apparently, finding a compromise acceptable to all the relevant parties - the victims, the asbestos companies who perpetrated the catastrophe and the companies' insurers - is more complex than Specter thought.

Specter, a senior Republican, has successfully won re-election in Pennsylvania over the past three decades, first when the state was largely working class and liberal, then adjusting his politics as the state slid slowly to the right. Known as a moderate, Specter was appointed to the chairmanship of the Judiciary Committee after last fall's elections, despite broad opposition from conservatives within his own party.

Because he is one of the few Senate Republicans with much history of constructive relations with the nation's trade unions - who, along with victims groups, are the main force in the struggle for a just fund - some observers thought Specter might do better working a compromise than his predecessor, Orin Hatch (R - UT). Apparently, that is not the case.

No one likes the present situation, in which the nation's backlogged courts are unable to process the millions of asbestos claims filed by victims and contested by companies and their insurers. Victims are dying, painfully, without compensation while companies, in bankruptcy and awaiting their day in court, have their assets temporarily protected. Meanwhile, insurers cannot get an accurate assessment of the extent of their long-range obligations. No one is happy.

The idea of the compensation bill is to skirt the court tie-up by having the companies and their insurers agree to finance a fund that would provide fair compensation to victims without further recourse to the court system. This would eliminate the legal and contingency fees that, otherwise, go to the lawyers on each side, potentially saving more resources for the victims. However, no one really knows the ultimate cost of the asbestos crisis, and earlier efforts to create compensation funds for particular companies (for instance, Johns Manville) proved woefully inadequate.

Thus, today's victims and the AFL-CIO refuse to sign-off on a deal that may not provide enough compensation, and the insurance companies refuse to contribute beyond their conservative cost projections. Some estimates put the final tab over $200 billion. In the last two Congresses, the insurance industry refused even the $140 billion Democratic Party plan that the unions have backed. However, the union position comes with the proviso that, should claims ever exceed the fund's capacity, unsatisfied victims can return to the courts. The industry demands no right of return to the courts, even if the fund goes broke.

Thus, while powerful commercial interests seek to limit their loss, asbestos workers and their families, seeking just compensation for their pain and loss, have morality on their side. It's a difficult political, moral and practical contradiction for Specter to manage.

While the lobbying continues, efforts to protect workers and the public from the asbestos hazard advanced last month on two other fronts.

Quietly, after last summer's huge exposure of EPA complicity in the city's plan to tear down an asbestos-infested, abandoned hotel, Ft. Worth (TX), following newly-reaffirmed federal regulations, began removing asbestos from the hotel in preparation for its coming demolition.

Also, a federal grand jury in Montana returned criminal charges against officials of the W.R. Grace & Co, which operated the vermiculite mine near Libby (MT) from 1963 to 1990. The indictment charges that, despite knowledge that the mine was contaminating the town with lethal asbestos, the company withheld the information while, at the same time, pursuing a public relations campaign that involved providing asbestos-laced vermiculite to local homeowners for home insulation and to local schools and parks for playground use. Today, approximately 1200 residents of the area - 70 percent of whom did not work at the mine - have asbestos-related health problems. More than 200 have died.

In addition to the company, the indictment charges seven company officials with obstructing EPA attempts to clean up the mine (four counts of obstruction of justice), of knowingly endangering the public and violating the Clean Air Act (three counts) and of masterminding a wire fraud scheme in order to avoid liability (two counts).

Facing law suits from thousands of former employees or their survivors, Grace & Co. currently is in bankruptcy proceedings. Yet, the company remains in operation with more than 6000 employees in nearly 40 countries and annual sales of approximately $2 billion.

Citing legal restrictions, the company refused comment on the indictments, but said it looked forward to "setting the record straight in a court of law." Whatever the criminal outcome, it likely will take years to resolve.

Meanwhile, the civil lawsuits are piling up, and the courts are overwhelmed. Specter and his committee have their work cut out for them.