Kerr-McGee to pay record toxic waste settlement

An oil and gas company has agreed to pay $5.15 billion to settle claims that for decades it left toxic waste in dozens of U.S. communities — and that it tried to dodge liability "in a corporate shell game."

Officials said Thursday that Kerr-McGee Corp.'s payout is the largest environmental contamination settlement in the Department of Justice's history.

For 85 years, Kerr-McGee contaminated dozens sites around the country with perchlorate, uranium, creosote, thorium and other toxins, before its 2006 acquisition by Anadarko Petroleum Corp., department officials said at a Thursday news conference. Kerr-McGee spun off its operations that were responsible for the cleanup.

“Kerr-McGee’s businesses all over this country left significant, lasting environmental damage in their wake,” Deputy Attorney General James Cole told reporters. “It tried to shed its responsibility for this environmental damage and stick the United States taxpayers with the huge cleanup bill.”

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Preet Bharara, U.S. attorney for the southern district of New York, said Kerr-McGee’s toxic waste hit Navajo Nation communities the hardest.

“Kerr-McGee left behind piles of radioactive waste when it stopped mining uranium,” Bharara said. “Facing massive liabilities for the mess it left in dozens of sites across the country, Kerr-McGee sought simply to walk away from it all in a corporate shell game.”

Bharara singled out a site in Manville, N.J., where “the EPA has had to spend hundreds of millions of dollars to fix what Kerr-McGee wrought.”

A housing development was built over the abandoned Manville site, and residents didn’t know what was under the development until “sludge literally began to bubble up into a resident’s basement,” he said.

A bankruptcy judge ruled in December that Kerr-McGee is responsible for all of the clean-up, despite the company trying to shift its liabilities into a new company, Tronox Inc., and that it lied to shareholders about the liabilities. Tronox filed for bankruptcy, and a bankruptcy trust filed one of the lawsuits that is subject to the settlement.

Of the $5.15 billion settlement, $4.4 billion will pay for environmental clean-up, Justice Department officials said.

The Environmental Protection Agency (EPA) helped investigate the case and clean the contamination.

“This case makes clear that companies cannot hide from their responsibility to pay for pollution,” said Cynthia Giles, assistant administrator for the EPA’s enforcement office.

In its own statement, Anadarko said it is glad to close the case, and that all of Kerr-McGee’s illegal actions in the case took place before the acquisition.

“This settlement agreement with the litigation trust and the U.S. government eliminates the uncertainty this dispute has created, and the proceeds will fund the remediation and cleanup of the legacy environmental liabilities and tort claims,” Al Walker, Anadarko’s chairman and president, said in the statement.