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Another Asbestos
Industry Bailout Bill:
They're Guilty; We Pay?

UE News, October 2000

By David Kotelchuck

   Another bailout bill ....

While state and federal governments aggressively try to keep poor and working people off their welfare rolls, corporate welfare bills keep popping up in Congress with plenty of Democratic and Republican sponsors. The most current example is an asbestos-industry bailout bill by Senator Mike DeWine (R., Ohio) and Congressman Henry Hyde (R., Il.), Chairman of the House Judiciary Committee. The bill (S.2955 in the Senate and HR.4543 in the House) currently has 70 Congressional co-sponsors, who are trying to get it passed quickly before the end of this Congressional session. To the bill’s supporters, speed and stealth are of the utmost importance — they hope to pass it before most Americans know what is going down, and how much the bill will cost American taxpayers.


What does the bill do? It would allow asbestos companies which have experienced recent corporate losses to get tax refunds for losses associated with their asbestos operations. The firms could carry the deductions as far back as the year when they initially produced asbestos products, in some cases over half a century ago. For example, Owens Corning, expected to be the major beneficiary of this bill, started its asbestos operations in the 1920s. The National Association of Manufacturers, which supports the bill, estimates that it would cost American taxpayers between $300 and $500 million over the next 10 years.

Critics of the bill, like Dr. Barry Castleman, an internationally recognized expert on asbestos hazards and an expert witness in many asbestos trials, call it: "an invitation to corporate crime. It says even after you get caught, you can come to this Congress and get the taxpayers’ money to bail you out." A flavor of what taxpayers are being asked to pay for is given by a 1999 Florida State Supreme Court decision awarding $31 million in punitive damages to an injured Owens Corning worker:

"The clear and convincing evidence in this case, revealed that for more than thirty years the company concealed what it knew about the dangers of asbestos. In fact, the company’s conduct was even worse than concealment, it also included intentional and knowing misrepresentations concerning the danger of its asbestos containing products." (Owens Corning Fiberglas Corp. v. Ballard, 1999)


The bill’s supporters claim that it is not a corporate bailout as it will benefit asbestos victims. They point to a section of the bill that says the refunded money must be "devoted [by the company receiving the refund] solely to asbestos claimant compensation and related costs." The key words here are "related costs." The corporate costs of fighting workers’ lawsuits are "related costs," as are costs of investigating personal injury claims, as are asbestos site clean-up costs. In fact, the bill does not ensure that any of the refunded money will go to workers who have won lawsuits against the company.

Furthermore, as New York Law School faculty member Ann Thomas has noted, the bill is "utterly lacking in any enforcement mechanism, either to prevent fraud or to insure that the money is used for the specified purpose within any particular period of time — it looks like the refund could well be used as an interest-free loan, because there is no time limit in the law for the companies to pay the money to the parties who are supposed to receive it." Or as NYCOSH Executive Director Joel Shufro commented, "The companies could legally spend hundreds of millions of dollars of tax refunds without giving a dime to workers and consumers with asbestos injuries."

Other critics of the bill, such as the American Public Health Association, have also warned that such a bill would set a bad precedent for the future: "Not only is this bill unacceptable, it also would establish a precedent that will be quickly embraced by the tobacco industry and other industries and corporations that are having difficulty meeting the obligations created by their negligence." The APHA statement goes on to say: "The bill is not an efficient legislative vehicle to ensure compensation for the victims of the asbestos companies’ decades of malicious negligence."


If this bill is so bad, why has it suddenly picked up a head of steam in Congress? And why hasn’t the coalition that headed off other asbestos-industry compensation bills in the past, not stopped this one in its tracks? The reason for this is that Owens Corning and other companies in similar positions have their asbestos victims in a hammerlock: If the companies declare bankruptcy, their victims (and their victims’ lawyers) may never receive the awards which they have won in the courts. As a result both the AFL-CIO and the American Trial Lawyers Association, which have fought hard to prevent earlier bailout bills, are remaining neutral on this bill, neither supporting nor opposing it. Recently, on Oct. 5, 2000, in a move that strengthens its hand in pushing for this bill, Owens Corning declared bankruptcy.

According to the Wall Street Journal, Congressional Republicans "are debating whether to try to insert a bailout plan for Owens Corning and other former asbestos manufacturers into this year’s final tax bill in this session’s few remaining days." If the bill is attached at the last minute to an omnibus tax bill, it will be voted on with no debate, according to Capitol Hill observers.

Asbestos workers certainly need and deserve compensation for the illnesses they have suffered as a result of their jobs. They need a bill that is decided upon after public congressional hearings, which were never held for this stealth bill. They need a bill which directly compensates them for their losses, and targets any tax refunds first and foremost for their claims and awards. The current bill does not do this — it guarantees all funds to the companies, and none to its injured workers. There is a better way, and it is not by having U.S. taxpayers aid and abet corporate crime.

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