3 members of Congress object as judge prepares to rule on Kalamazoo River cleanup settlement

Members of Congress protest Kalamazoo settlement

Three members of Michigan’s Congressional delegation have objected to a proposed federal settlement with a chemical company, saying the company should pay more than $103 million toward the cleanup of a polluted 80-mile section of the Kalamazoo River.

A federal judge in New York was expected to decide Friday whether to approve the settlement between the U.S. Justice Department and Houston-based Lyondell Chemical Co. A Lyondell subsidiary, Millennium Holdings LLC, has acknowledged partial responsibility for fouling the river with toxic polychlorinated biphenyls, or PCBs.

Under a plan for Chapter 11 bankruptcy reorganization, Lyondell agreed in March to pay $250 million to settle environmental claims and help pay for the cleanup of 15 properties across the country that are contaminated with hazardous waste.

Among them is the Kalamazoo River, which was tainted for decades with industrial wastes from paper mills and other manufacturing plants.

An 80-mile stretch of the river and five miles of a tributary, Portage Creek, were placed on the federal Superfund list of high-priority hazardous waste sites in 1990.

Lyondell would pay about $53 million to a trust fund cleanup at the former Allied Paper Mill, which includes a landfill on Portage Creek loaded with PCBs — compounds believed to cause cancer. An additional $49.5 million would cover other cleanup costs in the Superfund area.

Federal prosecutors said the settlement resolves all claims against the company for the Kalamazoo pollution.

But Democratic Sens. Carl Levin and Debbie Stabenow of Michigan and Rep. Fred Upton, a Republican whose district includes a portion of the contaminated area, complained this week the deal lets Lyondell off too easily.

Government agencies had been seeking up to $1 billion from Lyondell Chemical, a subsidiary of the Netherlands-based LyondellBasell, the world’s third-largest independent chemical company.

“I don’t think Lyondell Chemical Co. should be allowed to reorganize in bankruptcy in a way that allows them to shed 90 percent of their environmental responsibility,” Levin said in a statement.

In a letter to the Justice Department, the members of Congress asked how the deal was reached and whether the company had more money that could be devoted to the Kalamazoo River project. Environmental groups say the cleanup will cost far more than the company is set to pay.

“As they move forward and continue to profit, we will continue to dredge contaminated sediment out of the river,” said Jeff Spoelstra, coordinator of the Kalamazoo River Watershed Council. “They need to be at the table paying their fair share.”

Lyondell spokesman David Harpole said the agreement was “fair and more than reasonable” for a company working to reorganize its finances and continue providing jobs.

Robert Gerber, a federal bankruptcy judge, is scheduled to rule on the settlement Friday in New York. If he rejects it, Lyondell might convert the bankruptcy case to a Chapter 7 liquidation of Millennium Holdings that would leave no money for the Kalamazoo River cleanup, Harpole said.

Justice Department spokesman Andrew Ames said it would respond to Levin, Stabenow and Upton but declined further comment.