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Groups claim AK 'fear mongering' Environmental compliance costs

By Thomas Gnau

Journal Business Writer


Rejecting the idea that environmental regulations might threaten part of AK Steel Corp.'s Middletown Works, Ohio Citizen Action and the Sierra Club's Ohio chapter are pointing to AK's 2001 securities commission filing.

The filing with the U.S. Securities and Exchange Commission outlines AK's financial status, known legal proceedings and more.

Since March, AK's leaders have said they're concerned that future environmental compliance costs imposed by the U.S. Environmental Protection Agency might force them to weigh whether they can afford to make steel in Middletown. They have said that decision isn't imminent.

Last year, the U.S. EPA sued AK, alleging violations of environmental laws at Middletown Works, which employs about 3,700 people. Middletown-based AK is Middletown's and Butler County's largest employer.

In a letter to U.S. Rep. John Boehner, R-West Chester, the groups criticize him for urging U.S. EPA Administrator Christine T. Whitman to consider the effects the lawsuit may have on AK.

In a press release with the letter, the groups call AK's raising of concerns "fear mongering" and cite part of AK's 10-K filing.

"Management believes that the ultimate disposition of the foregoing proceedings will not have, individually or in the aggregate, a material adverse effect on the company's consolidated financial condition, results of operations or cash flows," is one section the groups cite.

"That's what (AK's) statement is, that it doesn't endanger their works," Ohio Citizen Action staffer Marilyn Wilson said Thursday.

But AK Vice President of Public Affairs Alan McCoy said the groups take 10-K statements out of context or fail to read them carefully.

He pointed to another 10-K statement, saying management doesn't expect "future profitability" to be harmed by "current environmental regulations," stressing the adjective "current."

AK's leaders estimate that future compliance costs might total $80 million in Middletown, he said.

Said McCoy, "My belief is that Ohio Citizen Action knows the truth, but they're attempting to kind of distort it using the 10-K filing."

In a May 3 letter to Whitman, Boehner wrote that AK is "a valuable corporate citizen that not only recognizes the need and importance of protecting the environment, but also has spent millions of dollars to do so."

Boehner's Washington, D.C., office has not seen the groups' letter, a press secretary said Thursday.


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