W.R. Grace has agreed to pay a record $250 million to reimburse the federal government for the costs of the investigation and cleanup of asbestos contamination in Libby, Mont.

According to the Justice Department and Environmental Protection Agency, the payout will be the largest in the history of the Superfund program, but people in the EPA say it may not come close to paying to remove the lethal fibers from the community, which earlier was estimate to cost far more.

The EPA has been on the scene in the tiny northwestern Montana community since November 1999, just days after the Seattle P-I first reported that hundreds of miners and their family members had died or were sickened by exposure to asbestos fibers contaminating the vermiculite ore. The newspaper reported on hundreds of Grace documents that showed the company knew that its ore was dangerous and that the miners were being sickened and killed by it, but never warned them of the hazard.

"Getting anything they can from Grace is good, but the graveyard is filled with miners, their families ... my parents and others who were killed by the asbestos in the ore that Grace mined for years," said Gayla Benefield, an activist who, with her partner Les Skramstad, fought to bring attention to the plight of their community.

"Obviously, this money will not bring them back, but maybe, just maybe, it may pay for the cleanup that will make this community safer for those who survived."

"Don't forget" she added, quoting Skramstad who died last year. "No one from Grace has ever come back to say they were sorry."

Gayla Benefield and Les Skramstad preparing for a memorial service in 2003. Photo by Andrew Schneider

Grace's problems are far from over. On Feb. 7, 2006, on the steps of the county courthouse in Missoula, Mont., U.S. Attorney Bill Mercer announced a 10-count criminal indictment against seven senior current and former Grace officials alleging conspiracy, knowing endangerment, obstruction of justice and wire fraud for endangering the people of Libby by concealing the well-documented hazards of the tremolite asbestos. The trial has been postponed three times as Grace challenges a variety of issues and the Justice Department said it has yet to be rescheduled.

The court decree settles a bankruptcy claim brought by the federal government to recover money for past and future costs of cleanup of contaminated schools, homes and businesses in Libby. In December, the Justice Department reported that Grace agreed to pay $34 million to cleanup 32 of scores of contaminated sites throughout North America where the company processed its vermiculite, which was sold for attic and wall insulation and lawn products.

The insulation, Zonolite, has been shown by the government to be heavily contaminated with asbestos and is still in 15 to 35 million homes in the U.S. and countless more in Canada and elsewhere.

A file photo of the Zonolite mine in operation

The federal government filed suit against Grace in March 2001 to recover its investigation and cleanup costs under the "Superfund" law. The lawsuit also named Kootenai Development Corporation -- a Grace subsidiary -- as a defendant due to its ownership of three contaminated properties in Libby.

In 2003, the federal district court in Montana awarded EPA over $54 million for cleanup costs incurred by EPA during its first year of attempting to clean up the heavily contaminated town.

That award has not been paid due to the chemical company's bankruptcy, which Grace and 61 affiliated companies filed in April 2001. At that time Grace said it took the action to protect itself from thousands of lawsuits filed on behalf of those sickened or killed by the tainted vermiculite.

Asbestos, a recognized human carcinogen, is known to cause lung cancer and mesothelioma, a lethal tumor of the lining of the chest and abdominal cavities. Exposure to asbestos can also cause asbestosis, a disease characterized by scarring of the lung.

Grace has corporate headquarters in Columbia, Md., and employees in nearly 40 countries. The company manufactures construction chemicals, building materials and chemical additives, among other things.

The settlement requires Grace to pay the $250 million within 30 days of bankruptcy court approval.

(Earlier stories on Libby can be found at this link)