Negotiations for Power  
Industry Consultants Hired  
Paper Industry Allies  
Thompson's DNR & Tourism

The first NRDA negotiation between Thompson's DNR, and the U.S. EPA, U.S. Fish & Wildlife Service, National Oceanic & Atmospheric Administration, and the Menominee and Oneida Nations occurred on December 20, 1996. At this negotiation, Thompson's DNR laid out three conditions which had to occur before the state would participate in the federal NRDA.28 

1.  No Tribes --- The state refused to negotiate with or enter into any agreement with Tribes as co-trustees, though the federal law states that Tribes have the right to serve as co-trustees in an NRDA. 

2.  State as Arbitrator --- The state demanded that the DNR (under Thompson's control) be allowed final 
decisions when the federal, tribal and state agencies disagreed on a course of action.  In other words, the Governor wanted control over the NRDA though the Governor had aggressively lobbied against it, and the DNR had not contributed to the preparation of the NRDA for the previous three years. 

3.  State Decides Responsibility ---Thompson's DNR demanded that the DNR have sole authority to allocate responsibility for natural resources among the trustees --- and the DNR wanted to assume all responsibility for contaminated sediments in the Fox River, to the exclusion of the federal and tribal parties.  Sediments are the key issue, yet the Governor refused to share responsibilities  and pursue cooperative efforts. 
 
The other parties argued that the natural resources of the River, Bay, and Lake Michigan are a shared national treasure and all parties have a mutual interest in their protection, management and wise use. 
 

Industry Consultants Hired  

The most significant aspect of the January 30,1997 $10 million Governor/Polluter settlement agreement  is the section allowing the Fox River Group (the 7 paper mills) to decide which consultants to hire for the technical work.27  DNR staff could veto the industry nominations, but not nominate the DNR's own preferred consultants. 
 
As a result, several consulting firms have been hired which usually represent polluting industries against states and the federal government around the country.  Many of these consultants are highly skilled in helping polluters avoid cleanup costs. 
 
In addition, the $10 million was not provided to the DNR up front, nor does the settlement contract create a specific budget which determines how much money will be spent on different aspects of the consulting work.  The Fox River Group is spending millions of dollars hiring numerous consultants, without DNR oversight, and it is unclear which consultants are included in the $10 million agreement.  In other words, the distinction between the DNR and industry consultants is blurred. 
 
When the consultants provide their research results, or other work products to the DNR, to become part of the state's official NRDA, the DNR can accept, reject or recommend modifications to the consultant's work.  However, if a consultant persists in sending unacceptable work to DNR, the settlement doesn't allow the DNR to hire other consultants to do the work. 
 
The DNR staff say the state has a "standoffish relationship" with the Fox River Group consultants.  They 
acknowledge that "in an ideal world" the state would provide its own resources on this issue, but under the Governor/Polluter agreement, the Fox River Group controls the money. 
 
As one DNR staff person stated, "it is a long drawn-out process to get anything done .... excruciating in every sense of the word."  At any given meeting, the DNR staff are greatly outnumbered by polluter lobbyists, lawyers and consultants. 

Deloitte & Touche --- Using funds provided by the Fox River Group, and on the recommendation of the polluters' attorneys, the DNR has hired Keith Easton, an attorney with Deloitte & Touche, to help the DNR coordinate all the consultants' NRDA work products, assess the quality of the work products, and evaluate whether the state's interests are protected in the legal processes involved with the state's NRDA cleanup. 
 
(The federal agencies had recommended that the DNR hire a nationally recognized government NRDA expert named Ken Ward, and DNR staff had agreed, but Keith Easton was hired instead.) 
 
Deloitte Touche Tohmatsu International is a huge corporation with over 63,000 employees in 126 countries.  They provide professional, accounting, auditing, tax and management consulting services, primarily to industry.37 
 
According to their Internet homepage, the firm has a "Process Industries Group" with "practitioners serving the world's major chemical and process-related corporations in finance, strategy, operations, information technology and organizational infrastructures."37  The chemical industry is strongly tied to the pulp & paper industry. 
 
According to the Deloitte & Touche Internet homepage, "Capital expenditures for environmental purposes such as pollution abatement add to energy costs, operating costs and waste costs, resulting in lower production efficiency... What is the industry's average rate of return on environmental expenditures? How will the industry reconcile these issues?"37 
 
These quotes and others show Deloitte & Touche is financially tied to the paper industry and other industries subject to Superfund and NRDA cases, which represents a serious conflict of interest. 
 
Deloitte & Touche has also been centrally involved in structuring Gov. Thompson's W-2 (Welfare to Work) program.37   Leaders of Deloitte & Touche donated $3,800 to Thompson's campaign in 1994-95.7 

de maximus --- This firm was first hired to work on the paper mills' behalf, but has now been given greater responsibility under the Governor/Polluter agreement.  De maximus is the primary contractor for Project Oversight and all the Fox River Group consultants answer to them. 
 
This consulting firm generally works for groups of industries responsible for toxic waste cleanups.  One of their cases was a Superfund site near the Ashtabula River in Ohio, called Fields Brook. 
 
Now that they have been hired under the auspices of the Governor/Polluter agreement, Traverse and the other industry consultants are using their DNR legitimacy to request from federal agencies information which is ordinarily not given to polluters due to litigation concerns. 
 
Traverse also tried to submit applications to federal agencies for environmental sample collection permits using the DNR as a co-applicant with the Fox River Group.  The DNR had to correct this and ensure the Fox River Group maintained sole responsibility.  

Remediation Technologies Inc. (ReTec) --- After a long period of state and federal negotiations, with Gov. Thompson pushing hard on Congress and the Clinton Administration to support state control, EPA decided to provide $1.6 million to the DNR and allow the DNR to lead the Remedial Investigation and Feasibility Study (RIFS), which is the first stage of the federal Superfund process.  Several consultants were interviewed for the job. 
 
Gov. Thompson's DNR followed the wishes of the Fox River Group and voted for ReTec. The U.S. EPA preferred other consultants.  The Fish & Wildlife Service did not have a vote.  The DNR and Fox River Group choice prevailed and ReTec was hired. 
 
ReTec is a subsidiary of Thermo Remediation, a Thermo Electron company.38   Thermo Electron(39)  includes 23 companies, including Thermo Fibertek,(40) an international conglomerate which owns 12 companies which manufacture paper machine accessories, process equipment, recycled fiber equipment, and water management systems for paper companies, especially recyclers. 
 
One of their companies, Thermo Wisconsin, Inc.(40) maintains its central manufacturing and laboratory facilities in Kaukauna, and specializes in drying technologies and incinerators used in the paper industry. 
 
Another of their companies, Thermo Fibergen,(74) operates GranTek in Green Bay.73   GranTek is the first of a series of plants Thermo Fibertek plans to build which take wastewater treatment plant sludge from paper companies, dries the sludge and sells it to use as the inert ingredients of pesticides, fertilizers, pharmeceuticals for livestock, and kitty litter.  The sludge is contaminated with PCBs.  GranTek has an air pollution permit from Thompson's DNR to release 10 pounds of PCBs into Green Bay's air each year.  More than 1,000 pounds of PCBs could be distributed each year with the dried sludge product from this one Green Bay facility.  Fort James Corp. is the main provider of sludge to GranTek. 
 
ReTec has a  serious conflict of interest, because it is financially tied to ongoing activities at Fort James Corporation, the largest of the Fox River Group paper mills, and may also be financially tied to other paper companies involved with Fox River cleanup. 
 
Top employees of Fort Howard Corp.  (now Fort James) gave $32,335.00 to Gov. Thompson and Lt. Gov. McCallum election campaigns from 1991 to 1997.7 
 
According to the DNR staff overseeing ReTec's work, ReTec did not disclose this conflict of interest during the initial consultant selection process and the DNR did not require any written disclosures.  On their Internet homepage, ReTec openly states, "We are advocates for our clients .... ReTec provides industry with innovative and cost-effective solutions to environmental challenges."38 
 
ReTec offers their expertise to " a broad range of industries.  These include: agricultural chemicals, manufacturing, manufactured gas, oil and gas production, petroleum refining, petrochemical, railroads, utilities."   They add, "ReTec excels at developing least-cost strategies that achieve the clients cost and time objectives."38 
 
Also on their Internet homepage, they state, "We are active participants in industry trade associations 
that track and seek to influence upcoming legislation and regulations.  ReTec is an affiliate member of 
the American Petroleum Institute, the National Petroleum Refiners Association, the American Wood Preservers Institute, and the Association of American Railroads.   In addition, our staff sits on the Superfund and RCRA subcommittees for the National Association of Manufacturers."38 [emphasis added] 
 
No mention is made on their Internet homepage of ReTec performing any work for governments. 
 
These quotes and others show that ReTec is financially tied to the paper industry and advocates on behalf of many other industries subject to Superfund and NRDA cases, which represents a serious conflict of interest in this case. 

Natural Resources Technology (NRT) --- This firm, based in Pewaukee, is a subcontractor to ReTec, working on the Remedial Investigation half of the RIFS.   NRT formerly worked for Wis. Electric Power Co. on a contaminated coal gas site.   NRT is developing background mapping of the  physical, chemical, and biological information about the river, and will delineate the volume, quality, and surface area of contaminated sediments to be remediated.  This last item is especially significant, because the polluters will want to deal with as little sediment as possible. 
 
W. F. Baird & Associates --- This is a coastal research, development, and engineering firm,with four offices worldwide, including one in Madison.41   Baird is another subcontractor to ReTec, working on hydrodynamic, sediment, and contaminant transport computer modeling for the Superfund RIFS.  They are also subcontracting to Limno-Tech for related modeling work. 

Triangle Economics Research (TER) --- An economic analysis of damages is a key portion of any 
Natural Resource Damage Assessment (NRDA). 
 
At industry's urging, Thompson's DNR allowed William Desvousges, of TER, to be hired by the Fox River Group to conduct the state's economic assessment of PCB damages, under the state's NRDA. 
 
William Desvousges is an expert witness used by industries all around the country to fight against economic damage claims under NRDAs.  TER's past clients include Alcoa, ARCO, General Motors, and several large power utilities and oil companies, in addition to EPA and the state of Nevada.42  Desvousges was an expert witness in legal actions defending EXXON in the Valdez Oil Spill case in Alaska. 
 
TER lobbied on the side of the the oil industry during Congressional debates on the Oil Pollution Act of 1990 Regulations.  This Act involves NRDAs used in cleaning up oil spills. 
 
Desvousges has argued that non-market based values can't be defended in a legal process.  Yet these values are critically important to the U.S. Fish and Wildlife Services' economic assessment under the federal NRDA.  The differing views will conflict in court. 
 
Keith Easton, of Deloitte & Touche, will play a key role in evaluating and responding to Desvousges' work product on behalf of the DNR.  This means a consultant chosen by the Fox River Group polluters will oversee another consultant chosen by the Fox River Group polluters, and Thompson's DNR will endorse the result. 

Exponent Environmental Group (formerly PTI Environmental Services) --- The Fox River Group hired this firm to fulfill two roles (1) determination of "injuries" under the NRDA, and (2) an evaluation of fish quality and contamination.  These are critical parts of an ecological and biological risk assessment for the state's NRDA. 
 
Exponent's Internet homepage states, "Natural resource damages are a 'sleeping giant' of corporate environmental liability.  Potential claims are enormous and settlement or litigation costs are often very high.... Exponent can help clients minimize costs associated with claims for damages to natural resources."43 
 
Exponent promotes "habitat equivalency analysis," (HEA) to estimate acceptable habitat "replacements" as part of damage compensation.43  (Triangle Economic Research's William Desvousges is also a promoter of HEA solutions.) 

According to DNR staff, industries generally use HEA to escape damage payments.  Many polluters would rather purchase existing habitat as a "replacement" than pay much higher costs of cleaning up and restoring a damaged habitat.  We've already seen a local example, with the $10 million Governor/Polluter agreement paying for habitat purchase, structures, trails, and parking lots at Thousand Islands Nature Center and Point au Sable. 
 
On Exponent's Internet homepage, they also state, "Exponent staff identify pivotal sources of uncertainty affecting risk estimates and help design and conduct research to support more realistic assessments of risk."43 Industries frequently emphasize "uncertainties" in court to avoid financial liabilities.  Thompson's DNR could end up legitimizing these polluter arguments in court. 

Entrix Environmental Consultants --This is a large firm with 1997 revenues of $30 million.44   Entrix usually provides expert testimony in court on behalf of polluting industries.  For example, Entrix represented Texaco Oil Company in an oil spill case in Terrebone Bay of Lake Barre' in Louisiana. 
 
According to Entrix's Internet homepage, other clients include "oil, gas, and pipeline industries, electric utilities, the chemical industry, auto manufacturers, transportation companies, mining companies, manufacturers of industrial equipment, electronics industry, forest products industry, law firms, and government."44 
 
An Entrix specialty is "strategic management of liability."44   Their homepage states: "... many remedial actions may be causing more ecological harm than good. While ecological liabilities are a fast-growing area of environmental liability, state and federal agencies only recently have developed policies and regulations to deal with this situation.  This fact has created significant flexibility that can work to the benefit or detriment of a potentially responsible party.  Developing and implementing strategies that capture this flexibility are important in the overall reduction of liability for the potentially responsible party."44 
 
Entrix consultant John Giesy, of Michigan State University, has been hired by the Fox River Group to perform PCB risk assessments for the state's NRDA. 
 
Giesy was recently quoted in the Green Bay Press Gazette on August 2, 1998, suggesting a "bounty system for fish in which the state would exchange a clean fish for a contaminated fish caught in the Fox River --- as well as a $10 incentive.  The system lowers public exposure to PCBs without discouraging the local boating and fishing economy."45   Giesy also says Bald Eagles can be fed clean fish from buckets, to prevent their exposure to Fox River PCB contamination. 
 
He also stated, "When we look at alternative actions, we want to make sure we take ones that are appropriate from an economic and human health standpoint.  It is not very useful if the risk is fairly marginal --- which it probably is for the population living around the Fox River --- to raise expectations to the point where you can't fulfill them."45 
 
By allowing Giesy to write the state's risk assessment, the DNR is legitimizing the work of an industry consultant who argues that Fox River human health risks are "marginal."  This is not a strong position for the state, if Thompson's DNR intends to require a cleanup. 

Limno-Tech Inc. (LTI Environmental Engineering) --- This Ann Arbor, Michigan, firm is working for the Fox River Group on computer simulations of water, sediment and fish quality. 
 
According to the company's Internet homepage, Limno-Tech has provided environmental consulting services to the paper industry for more than 20 years.46   LTI has also worked for governments, such as EPA, on the Hudson River in New York. 

HydroQual, Inc. --- This consultant is a subcontractor to ReTec to assist with ecological risk assessments and computer modeling.  HydroQual is studying hydrodynamics, sediment transport and particle dynamics (algae transformation) in the river and bay. 

Blasland, Bouck & Lee (BBL) --- P.H. Glatfelter Paper Co. hired BBL in 1991 for an independent 
Remedial Investigation and Feasibility Study of PCB contamination in Deposit A in Little Lake Butte des Morts, a flowage of the Fox River near Neenah.  They recommended no action. 
 
BBL usually works for the "potentially responsible parties" in such cases, and usually recommends no action, or just capping, as they did when they worked for Manistique Paper Company in Michigan. 
 
Other clients of BBL include EXXON, Aetna, Allied Signal, Amoco, AT&T, Bristol-Myers Squibb, Chevron, Chrysler, Coca-Cola, Eastman Kodak, DuPont, Enron, Ford, General Electric, GM, Lockheed Martin, Mobil, Rockwell International, many oil, gas, and utility companies, municipalities, and law firms.48 
 
BBL's internet homepage states,  "Environmental consultants must have a thorough understanding of the legal process and their role in it and be prepared to assume that role on a client's behalf.  BBL has been successfully supporting our clients in regulatory and legal arenas alike, with results that maximize protection of the environment while minimizing client liability."48 
 
Last September, BBL went to Manistique to collect samples during EPA dredging there, and was observed using a long surveyor's "stadia rod" many times, purportedly for "depth measurements," which stirred up the sediments prior to taking turbidity measurements of water quality.  These samples could have been used to argue inaccurately that dredging stirred up PCBs. 
 
EPA's on-site Dredging Coordinator Walter Nied had observed BBL's sampling process, and directed them to dump the water samples and come back only after they had an approved sampling workplan. 
 
In November, BBL came back to sample in the middle of the dredging, to claim EPA's dredging left PCBs behind,(49) though EPA clearly hadn't finished yet. 
 
This company is very active in negotiations on behalf of the Fox River Group.  BBL has also been an aggressive industry advocate on the Hudson River, Sheboygan Harbor, and at Ruck Pond in Milwaukee --- other PCB sediment cleanup sites. 

Foth & Van Dyke --- This local consulting firm was hired by the DNR to coordinate and conduct work on the Deposit N demonstration project in Kimberly. 
 
Foth & Van Dyke frequently works for the paper industry and recently worked for Exxon on technical aspects of the Crandon Mine on the Wolf River. 
 
Foth & Van Dyke was also the principle engineering firm for the Flambeau Mine Reclamation plan which recently required major revisions due to the inadequacy of the prairie planting and maintenance design. 
 
Leaders of Foth & Van Dyke donated $3,350 to Gov. Thompson's and Lt. Gov. McCallum's re-election campaigns from 1990 to 1997.7 

Montgomery Watson --- This consulting firm was recently hired by the DNR to coordinate and conduct work on the Deposit 56/57 demonstration project downstream from the Fort James Mill in Green Bay. 
 
Montgomery Watson is a large worldwide engineering, construction, technology and management company which has worked for both industry and governments.  Mining companies have been major clients.72 
 
Leaders of Montgomery Watson donated $600 to Gov. Thompson's re-elections, in 1996 and 1997.7 

Ecochem, Inc. --- This consultant is conducting data validation for the federal agencies, and is also a 
subcontractor to ReTec. 
 
Paper Industry Allies  

The pulp and paper industry in Wisconsin is closely tied to many law firms, insurance companies, financial institutions, and lobbying firms.  Altogether, these interests have donated  $1,939,566 to Gov. Thompson's and Lt. Gov. McCallum's campaigns between 1990 & 1997.7 
 
The insurance industry would be particularly interested in avoiding the liability for Fox River cleanup.  Financial institutions would be interested in the financial stability and vigor of the largest industrial sector in Wisconsin.  These types of institutions have been very active in attacking the federal Superfund program, on behalf of polluting industries. The chemical, oil and other industries are also working to weaken Superfund.51 
 
Together, they have a strong interest in preventing a national precedent from being set here in Wisconsin. 
 
The Realtors Association of N.E. Wisconsin, Inc. also lobbied recently against Superfund, because they feared real estate investments would drop.52  Realtors, developers and special interest groups who represent their views donated more than $406,339 to Gov. Thompson's elections, from 1993 to 1997.7 
 
Thompson's DNR & Tourism 

The Tourism Industry gave $432,923 to Gov. Thompson and Lt. Gov. McCallum for their re-election campaigns, 1991 to 1997.7 
 
For years, many representatives of this industry have strongly opposed publicity concerning fish-eating advisories for PCBs, because of adverse effects on tourism.  Many charter-boat and sportfishing business leaders oppose PCB fish warnings.57 
 
During the past year, many local government officials have lobbied against Superfund listing because tourism leaders feared the "stigma" of Superfund would scare tourists away from the Fox River Valley.56 
 
Many DNR staff also seem to discourage publicity about fish eating advisories because warnings reduce the purchase of fishing licenses, the major source of funds for the DNR's fishery programs and staff. 

Report Sections  

The Purpose of this Report  

Twelve Years of Delay - A Fox River Clean-up Timeline 

Deals, Consultants, Paper Industry Allies, and Tourism 
 
The Health Risks of PCBs and Landfilling Contaminated Sludge 
 
Legislative Connections, Paper Company Economics, and Industry Control of the Process 

The Fed's Step In 
Conclusions and Recommendations 

The Paper Money Trail - Political Campaign Contributions to the Governor 
 
DNR Report Study Methods 

References 
 

Up to Top

Back to Table of Contents

Back to NRAP Reports

Home