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Native Sun News: Tribes benefit from $5.15B uranium cleanup

The following story was written and reported by Talli Nauman, Native Sun News Health & Environment Editor. All content © Native Sun News.

Kerr-McGee’s payment for abandoned uranium mines will help clean up sites such as this one at Riley Pass located at the headwaters of the Cheyenne River. Courtesy/USFS

Navajo, Sioux and other tribes benefit from $5.15 billion, largest payment ever for clean-up
By Talli Nauman
Native Sun News Health & Environment Editor

Washington, D.C. -- Navajo, Sioux and other tribes are among many populations across the United States who will benefit from a $5.15 billion settlement with Anadarko Petroleum Corp., the U.S. Department of Justice said April 3, in announcing the largest payment ever for the clean-up of environmental contamination.

After a decade of wrangling, the government, the Navajo Tribe, 11 states and other creditors agreed to settle for that amount, which was determined in a December court judgment on fraud charges against Anadarko and its wholly owned subsidiary Kerr-McGee Corp.

“Pursuant to the settlement agreement, the defendants agree to pay $5.15 billion to settle the case, of which approximately $4.4 billion will be paid to fund environmental clean-up and for environmental claims,” the Justice Department said in a written statement. “This is the largest payment ever for the clean-up of environmental contamination.”

The Navajo Nation, one of the litigants in the Tronox LLC bankruptcy case that led to the settlement, will receive $1 billion of the payment to clean up the radioactive waste at 49 uranium mines Kerr-McGee abandoned in the northeastern part of the tribal jurisdiction in New Mexico, it said.

“The settlement will be a great help in restoring the abandoned uranium mine sites,” Navajo President Ben Shelly said in an official statement. “But we must not forget about the 460 other sites still in need of cleanup funds,” he added.

Shelly personally broke the news to the Dzil Yijiin Regional Council at Black Mesa Chapter House, where he was scheduled to speak on the date of the settlement announcement. He called it a major victory for the Navajo Nation.

The settlement put to rest many of the claims Tronox and its debtors filed when it declared bankruptcy in 2009.

The court found that Kerr-McGee, which later became a property of Anadarko, demonstrated “pervasive evidence of both the intent to defraud creditors and a sophisticated plan to carry out that intent,” by creating Tronox to oversee all its environmental liabilities without providing sufficient assets to do so.

Acting Assistant Attorney General Robert G. Dreher called the settlement of the resulting claims “a just resolution of an historic injustice to the American people and our environment. The money recovered will result in clean-ups of a toxic history the old Kerr-McGee unsuccessfully tried to walk away from,” he said.

Among them is more than $270 million-worth of cleanup Tronox must undertake at the Riley Pass Mine complex, located upstream from the Cheyenne and Missouri rivers, which provide water for seven South Dakota Indian reservations.

The mine complex, also known as the Dakota Lignite Mining Area, or Slim Buttes Area, is a former Kerr-McGee mountaintop uranium removal site in the Cave Hills of extreme northwestern South Dakota’s Harding County, at the headwaters of streams that feed the Standing Rock, Cheyenne River, Crow Creek, Lower Brule and Yankton Sioux reservations.

The Pine Ridge and Rosebud reservations obtain drinking water from the Missouri River through pipelines in the Mni Wiconi Rural Water Project.

The U.S. Forest Service estimates its past and future reclamation costs for Kerr-McGee’s abandoned uranium tailings at Riley Pass to be about $63-million, in addition to Tronox’s own cleanup liability.

Working for 25 years on the reclamation project, the Forest Service was able to recover $7.2 million from Tronox before the settlement was signed April 2.

With the agreement to accept the $5.15 billion judgment, the agency expects to finish its job.

“The Forest Service’s share of this amount would be more than sufficient to carry out the estimated cost of currently planned work at Riley Pass,” it said in a written dispatch following the judgment.

Kerr-McGee’s “enormous legacy of environmental and tort liabilities” included more than 2,700 cleanup projects in 47 states, among them federal Superfund projects in Jacksonville, Florida; Columbus, Mississippi; Manville, New Jersey; Soda Spring, Idaho; West Chicago, Illinois; Milwaukee, Wisconsin; and Wilmington, North Carolina, according to court records.

“Kerr-McGee’s businesses all over this country left significant, lasting environmental damage in their wake,” Deputy Attorney General James Cole said April 3. “It tried to shed its responsibility for this environmental damage and stick the United States taxpayers with the huge cleanup bill,” he said at an official announcement made in Washington, D.C.

“Through a lot of hard work, we uncovered this fraud and recovered over $5 billion dollars for the American people,” he said. “This settlement demonstrates the Justice Department’s firm commitment to preventing and combating all forms of fraud and to securing environmental justice,” he added.

U.S. Bankruptcy Judge Allan L. Gropper found that “Kerr-McGee transferred assets with the intent to hinder or delay creditors, including particularly environmental creditors.”

His ruling prompted Manhattan U.S. Attorney Preet Bharara to state: “If you are responsible for 85 years of poisoning the earth, then you are responsible for cleaning it up.

“The company tried to cleanse its valuable business from its toxic legacy liabilities. Now the defendants will pay to cleanse the land and water,” he added.

The settlement agreement is contingent on approval by U.S. Bankruptcy Court and U.S. District Court, both in the Southern District of New York, as well as the issuance of an injunction barring similar claims from being asserted by third parties, Anadarko noted in its April 3 announcement of the transaction.

The parties to the settlement have agreed to release claims against each other and have provided covenants not sue one another, it said.

What’s more, the federal government will provide contributions to protect Anadarko from third parties seeking reimbursement from Kerr-McGee at more than 4,000 sites covered by the covenants, the company said.

“Anadarko's employees have continued to deliver remarkable results that have not been fully recognized by the equity markets due to the potential implications of this case,” Anadarko Chairman, President and CEO Al Walker said.

“We look forward to having our exceptional results become the foundation for even greater operating and share-price performance through the balance of this decade and beyond," he added.

(Contact Talli Nauman, NSN Health and Environment Editor at talli.nauman@gmail.com)

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