Tonawanda News

June 23, 2013


By Jessica Bagley
The Tonawanda News

Tonawanda News — Residents here know well by now the story behind Tonawanda Coke. Years of health complaints, the long struggle for meaningful regulatory oversight and, finally, vindication in the form of a criminal conviction for grossly polluting the air and ground.

Tonawanda Coke and its environmental manager, Mark Kamholz, were found guilty in March of violating two federal laws, the Clean Air Act and the Resource Conservation and Recovery Act, when a federal jury determined that they dumped hazardous waste on the ground and spewed thousands of tons of carcinogenic chemicals into the air. The defendants face a possible 75 years in prison and more than $200 million in fines when they’re sentenced next month.

The final chapter on JD Crane, the man who owns the facility at the center of the controversy, hasn’t been written. Crane wasn’t charged in the 19-count indictment against his company and his name wasn’t uttered once during the 30-day trial. But an extensive review of his business practices in five other communities yields some alarming findings. 

While activists and politicians alike are lining up to decide how to spend the money, a Tonawanda News investigation sought to find out how other communities that hosted Crane-owned coke foundries fared in their fight to be made whole. The result is shockingly consistent — a string of broken laws and broken promises that add up to millions spent cleaning up mess after mess Crane left behind.

If Crane’s business past is any indication of Tonawanda Coke’s future, locals may be in for years of expensive cleanup.

Erie Coke: A too familiar tale

Crane’s plant in Erie, Pa., is Tonawanda’s only sister facility still in operation. The plants are two of just 19 coke-making facilities in the nation, and their histories are closely linked. 

Both plants have repeatedly violated governmental regulations, and a familiar Tonawanda face — Kamholz — managed the Erie plant’s environmental compliance for 19 years.

His dealings with the Pennsylvania Department of Environmental Protection were just as strained as Tonawanda Coke’s dealings with the New York agency, a review of environmental records shows.

Kamholz left the Erie plant in 2009 after five antagonistic years that were marked by a struggle between Erie Coke and the DEP, as well as residents’ complaints about plant emissions — which allegedly left locals with myriad health problems from headaches to cancer.

The DEP “attempted through several enforcement actions” between 2005 and 2009 “to have Erie Coke comply with state and federal requirements,” John Guth, a DEP Air Quality manager said. “The majority of the violations were based on exceedances of emission limits ... both state and federal requirements.”

Regulators’ repeated attempts to bring the facility into compliance were met with obstinant refusal. Health complaints poured in.

In 2010, the DEP and Environmental Protection Agency filed a federal complaint against the company, and the DEP issued an order to Erie Coke and Crane that revoked their federal operating permit and required the plant to “cease all charging operations” within 48 hours.

Erie Coke challenged that order and brought the matter to court. Crane, who customarily flies under the radar, testified in defense of his company. Although Crane said he can — and has — shut down a plant in one day, he claimed ceasing operations would cause supply problems for his customers in the steel industry.

DEP officials were not persuaded, accusing the company of having no interest in complying with regulations.

But after that hearing, Erie Coke and the agency reached a settlement in June 2010. 

In that agreement, Erie Coke agreed to make more than $15 million in improvements to the facility, including the replacement of and repairs to 53 ovens that are used to burn coal. 

“There were cracks in many of the ovens, which were very old,” Guth said. “That led to incomplete combustion ... and a lot of emissions.”

The agreement also contained a $4 million fine, with an additional $2 million in to be put in escrow for the DEP if the improvements were not made. With the three-year deadline for finishing the improvements looming, Guth said the company has “more than met” the standards outlined in the agreement.

Local residents can only speculate why negotiations with Erie Coke were more successful than similar efforts in Tonawanda. But the Erie agreement came only after the Tonawanda plant was raided by federal investigators and Kamholz personally was named in the resulting 19-count federal indictment.

And although complaints in Erie have decreased since the repairs have begun, the effects of the pollution are still unknown. The Pennsylvania Department of Health and the Agency for Toxic Substances and Disease Registry are in the process of completing a health-effects study similar to the New York Department of Health study in Tonawanda, which found statistically significant elevated rates of cancer among those living near the plant.

Detroit Coke meets abrupt end

In a courtroom in 2010, while defending Erie Coke’s right to stay open, Crane said he’s perfectly capable of closing a plant in one day. 

He knows because he’s done it before.

Crane purchased Detroit Coke in 1980. Although the Environmental Protection Agency was unable to confirm the reports, the Detroit Metro Times wrote that the agency made repeated failed attempts throughout the decade to get the plant to comply with the Clean Air Act and other federal regulations.

In 1991, the EPA threatened to shut down the plant for failing to obey air quality standards, the Metro Times reported. 

Then, just a month later on Sept. 12, 1991, Crane locked the doors. Employees said they were given two hours notice or less of the plant’s closing.

Workers sued Crane, who admitted he violated the Worker Adjustment and Retraining Notification Act, which requires that a company with at least 100 employees provide staff members with 60 days written notice before a mass closing or layoff. 

The Federation for Industrial Retention and Renewal put the closing of Detroit Coke on its “dirty dozen list” for irresponsibly shutting down the plant, abandoning workers and the community. 

Not only were the employees left high and dry, Crane also left the site in a state of environmental disarray. Patricia Lawton, of the Michigan Department of Environmental Quality, said numerous pits of hazardous coal tar were left on the property and that soil and groundwater were contaminated. 

In 1999, eight years after Crane abandoned the plant, Honeywell took over for a former owner of the site, Allied Chemical Corporation, and voluntarily entered an administrative order to fund the cleanup.

The remediation is still ongoing, Steven Hoin of the DEQ said. 

Despite being the most recent owner of the site before it was abandoned, Crane was not held financially responsible for cleaning it up.

“We have not been engaging with the former Detroit Coke (owner) for the project,” Hoin said. “He is not on board.”

Show Me State showdown

Another Crane enterprise, Carondelet Coke, offers a worrying snapshot of what could be in store for Tonawanda’s plant and local taxpayers if hefty fines force its closure. 

Crane operated Carondelet Coke in St. Louis from 1980 until 1987 before abandoning the site, officials there said. After shuttering the plant, he neglected to pay taxes for at least three years, and, in 1992, the city finally foreclosed and took ownership of the property. 

“When taxes are more than three years delinquent, the government files suit ... and there is a foreclosure sale,” said Otis Williams, deputy executive director of the St. Louis Development Corp. “We are the receiver of all properties that are not bought at the sale.”

“Property” is a nice way of describing a site that stood in utter decay. Photos taken by the St. Louis Post-Dispatch in 2012 show an industrial wasteland with crumbling, graffiti-covered buildings littering the site.

When operational, the Missouri plant followed Crane’s M.O. 

The site, too, was plagued by a variety of environmental concerns such as asbestos in the factory’s buildings and various chemicals — including benzene, the chemical the Tonawanda facility was cited as emitting at 10 times the legal limit — were found in the soil and groundwater. 

The city agency deemed the 42-acre site “unsafe with significant levels of contamination,” and the state scored the property as greater than 28.5 on the federal government’s Hazard Ranking System, making it eligible for the priority Superfund list. 

The city could have had the property listed as a Superfund site and forced the responsible owners to pay for the remediation. But Williams said the agency opted for a different route to expedite the process and avoid the stigma of the national program, and instead attempted to negotiate with the three former principal owners: Laclede Gas Company, Great Lakes Carbon and Crane’s corporation, Carondelet Coke.

Laclede and Great Lakes sat down with the city and voluntarily agreed to contribute funds to the costly cleanup. Crane gave nothing.

“We attempted to bring the most recent owner into the negotiation conversations, and they refused,” Williams said. 

Although the two previous owners did give $471,250 each, an investigation by Post-Dispatch reporters Jeremy Kohler and Tim Logan revealed that taxpayers funded the rest of the cleanup through $12.3 million of state brownfield tax credits, funds that were then subtracted from Missouri’s budget.

Now, more than 20 years after Carondelet Coke was abandoned, the property is finally cleaned up and ready for reuse — no thanks to Crane. 

Tennessee and Toledo 

Like Tonawanda Coke, Crane’s plant in Toledo was also the subject of a lawsuit. Crane bought the Ohio plant in 1987 and just two years later the Ohio Attorney General sued the company for violating six emission limits. 

The suit came just a year after the EPA ordered the plant to pay $40,000 in fines for failing to use mandated pollution-control equipment. 

“They’re well aware of their continued violations,” Donald Moline, Toledo’s commissioner of environmental services told the Toledo Blade in June 1989. “Any day of the week we can go out there and get a violation.”

Residents’ complaints about the plant’s pollution closely mirrored the health issues Tonawanda residents have experienced. For years, Toledo citizens complained about the plant’s soot and dust settling on their homes and cars — allegations that local activist Jackie James-Creedon has also levied. 

Now, decades later, the plant is owned by the Toledo Lucas Port Authority. An agency representative said it purchased the plant from Beazer Corp., in 2004. 

Beazer agreed to complete the environmental remediation at the plant, which cost $5 million. Crane, along with any other previous owners, did not contribute to the cleanup. 

Unlike Crane’s management of his other plants, his run in Chattanooga, Tenn. was short-lived. But the brief history speaks to the a long record of his plants’ financial troubles.

Crane only operated Southern Coke for 11 months in 1986 before declaring bankruptcy, Tennessee Department of Environmental Conservation records show. The city of Chattanooga then took over the site due to an issue with back taxes, but city officials refused to comment on whether Crane was responsible for the delinquent funds. 

Crane, along with a long history of other operators including the U.S. government during World War II, left the site contaminated. Soil testing at the plant detected concentrations of benzene and acetone. 

Mead Westvaco, the owner that managed the site at the time of the plant’s final closing in 1987, voluntarily paid for the remediation of the site. Crane — again — gave nothing. 

Given his extensive track record sticking just about anyone else with the bill, local leaders’ efforts to direct any federal fines toward remediation and recovery here could be overly optimistic — or all for naught.

When Judge William Skretny issues his sentence next month it will almost certainly include fines reaching into the millions of dollars.

But if Crane’s history is any indication those seeking to claim victory might be well advised: Don’t count the money just yet.

Contact reporter Jessica Bagley at 693-1000, ext. 4150