Legislative Connections  
Paper Company Economics  
Industry Dominates Committees  
Public Intervenor Eliminated

Republican control of the Legislature increases Gov. Thompson's personal political power in Wisconsin.  He would likely be grateful to donors who helped his allies. 
 
Between 1990 and 1997, the pulp and paper industry donated $107,210 to Republicans running for the state legislature, and $18,650 to Democrats.7  The paper industry favors Republicans over Democrats five to one, and this difference in support tended to aid Republicans in their bid to maintain majority control over both the Senate and Assembly in the Wisconsin Legislature. 
 
Though some Republicans have good environmental records, the sum of Republican votes appear to favor the paper industry.  In a party line vote in 1995, Republican legislators voted by a slim majority over Democrats to give Thompson control over the  DNR and to eliminate the public intervenor. 

Paper Company Economics 

With over $1 billion in potential clean-up costs at stake, Gov. Thompson and the polluting industries have argued that a too-aggressive cleanup could endanger economic health and jobs in the Fox River Valley by forcing the paper mills into bankruptcy.  However, several factors need to be considered: 

Costs are shared among several corporations. 

Costs can be spread over several decades with long-term financing. 

EPA has a policy of not forcing companies out of business.  They will adjust the clean-up to allow continued business operation. 

Costs levied against parent corporations for cleaning the Fox River are not connected to the day-to-day operations of specific mills.  If a mill is currently operating at an acceptable profit, why would the parent corporation shut it down? 

Fort James Corporation --- According to 1998 reports filed with the SEC, Fort James is the world's number one tissue-maker, and the lowest cost producer of tissue products in North America.  According to Standard & Poor's Stock Reports, Fort James' total 1996 assets were over $6.54 billion.   Hoover's 
Company Profile (online) lists Fort James with 1997 revenues of $7.259 billion.  Fort James Corporation is based in Illinois, and investing heavily in China, Turkey and Russia. 
 
Between 1995 and 1998, Fort Howard/Fort James Stock price increased over 400% from $12.50 to over $50 per share.  Michael Riordan, CEO, recently received over $14 million in a "golden parachute" separation agreement from the company. 
 
According to Fort James' Annual SEC Report, "the company's accrued environmental liabilities, including remediation and landfill closure costs, totaled $55.4 million and $57.0 million as of December 28, 1997 and December 29, 1996, respectively."   In other words, the company is already preparing for major cleanup costs, yet they continue to operate profitably. 

Wisconsin Tissue --- According to Standard & Poor's, Chesapeake Corp. (parent of Wisconsin  Tissue) has assets of $1.29 billion, and 1996 revenues of $1.15 billion.  (Owned by a Virginia corporation.) 
 
NCR Corporation --- NCR's online Homepage shows their total revenue for 1997 was $6.6 billion.   (Owned by an Ohio corporation.)  NCR was purchased by AT&T in 1991.  In February 1996, the U.S. Fish and Wildlife Service notified NCR that NCR would be considered a 'Potentially Responsible Party' liable for Fox River cleanup.  On December 31, 1996, AT&T divested itself of all stock in NCR; therefore, AT&T's liability for Fox River cleanup is unclear at this time. 
 
P.H. Glatfelter Co. --- $60 million in net income in 1996.  (Owned by a Pennsylvania corporation.) 

Appleton Paper --- The 1998 Wards Business Directory, reports Appleton Papers had $1.2 billion in sales at its Appleton plant.  (Owned by a large British and French holding company, Arjo Wiggens Teape Ltd.) 

U.S. Paper Mills  --- $58 million in sales at its Green Bay and Menasha mills.  (Privately owned.) 

Riverside Paper --- $115 million in sales at its Appleton mill.  (Privately owned.) 

When the Remedial Action Plan (RAP) process started in 1986, the goal was to examine and pursue all implementation options which could achieve cleanup, including enforcement actions.  The RAP committees included a wide range of interests and attempted to provide a balanced public forum for discussion.  Several public hearings and public comment sessions were held. 
 
Within a few years of Thompson's election, during the implementation phase, the Remedial Action Plan process gradually shifted to include only "voluntary, cooperative approaches."  Participants were criticized for "assigning blame" or "pointing fingers" if they called for the polluters to pay for river cleanup or studies. 
 
After five years of participation, in 1991, the only active Fox River environmentalist involved (Rebecca Katers) was removed by the DNR from the RAP policy committees. This left the RAP committees dominated by paper industry, local business, local government and academics.  In early 1992, the RAP committees wrote position papers supporting only voluntary cleanup efforts and significant taxpayer funding of the cleanup, something Katers would have aggressively opposed. 
 
When the RAP failed to produce results, and the EPA began to pressure the state to take action, DNR staff hired specialists to initiate a state NRDA and spent three years, from 1989 to 1992 preparing for legal action. 
 
DNR staff memos show that Gov. Thompson was consulted for approval of the NRDA and other legal efforts.  At the same time, DNR staff met with Wisconsin Paper Council and other industry lobbyists.  The NRDA action was stopped cold in the winter of 1991-92.  Instead, Thompson's DNR created another "voluntary approach" in 1992, called the Fox River Coalition (FRC), also dominated by the paper industry and which failed to take action for another 6 years. Much of the FRC effort focussed on lobbying for public taxpayer funding of the cleanup --- local, state or federal. 
 
The Remedial Action Plan committees continued to meet but most of their energies were diverted to working on non-point pollution and children's education efforts which were non-threatening to industry. 
 
Systematic DNR and RAP education efforts during this period misled the public, giving the impression that all point sources (such as paper mills) are adequately controlled and the only important issue left to address is non-point runoff from farmers' fields and urban areas. 
 
During this period, Thompson's DNR was cordial to paper industry representatives and openly hostile to local citizen observers at Fox River Coalition meetings. The Coalition lacked even one environmentalist member.  In 1994, shortly after Public Intervenor Thomas Dawson questioned DNR staff about the political imbalance of the Fox River Coalition, the DNR attempted to legitimize the process by adding environmentalists.  But the Coalition's pro-industry stance was already set (and the FRC had promised a complete clean-up plan in only two months); therefore, environmentalists refused to join. 
 
Public Intervenor Eliminated 

In 1994, Thomas Dawson, an attorney with the Wisconsin Public Intervenor Office, began indepth research of the Fox River cleanup problem.  He began an "investigation file" and wrote memos to summarize his findings.  He also wrote several letters to agencies and political leaders in support of the U.S. Fish & Wildlife Service's NRDA, and asked difficult questions about Fox River Coalition activities. 
 
In April 1994, a law firm which frequently represents Fort Howard Corporation, Michael Best & Friedrich, sent the Intervenor Office an open records request for all Dawson's contact logs, correspondence and other information regarding the NRDA. 
 
In the spring of 1995, the Governor and Republicans in the state legislature eliminated the Intervenor Office which prevented Dawson from further work on the Fox River (or other issues).  Citizens no longer had an unbiased source of expert legal advice.  Most law firms in Wisconsin have conflicts of interest, because they do business with the paper industry. 

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