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Ohio News |
Article published Tuesday, August 12, 2003
Ohio seeks details on Envirosafe
ownership
Some stockholders remain
unidentified
(THE BLADE/DIANE HIRES)
Toledo’s water intake
lines run through the middle of the Envirosafe landfill in
Oregon.
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By JAMES
DREW
COLUMBUS BUREAU CHIEF
COLUMBUS - For more than two years, state
officials have been trying to determine who owns the Envirosafe
landfill in Oregon.
Ohio law requires not only that ownership
of hazardous waste landfills be disclosed, but that the backgrounds
and fingerprints of officers, directors, and key employees be
provided to state officials.
That hasn’t been done, said Gary
Taylor, supervisor of the Ohio attorney general’s environmental
background investigation unit.
In 2001, Envirosource, Inc.,
the Pennsylvania parent company of Envirosafe Services of Ohio,
Inc., which operates the landfill, merged with ES Acquisition
Corp.
State officials determined that ES Acquisition is a
wholly owned subsidiary of GSC Recovery II, L.P., which in turn is a
subsidiary of GSC Partners, of Florham Park, N.J.
Mr. Taylor
said GSC Partners failed to provide background information to the
state by a Jan. 12, 2001, deadline, and still has not provided full
information.
"During the course of the investigation, the
attorney general’s office received confusing and contradicting
information regarding the merger, organizational structure, and
transfers of ownership concerning the parent entity or entities" of
Envirosafe Services of Ohio, Inc., Mr. Taylor wrote in a report to
the Ohio Environmental Protection Agency, which regulates the
landfill.
The background investigation is to ensure that
owners and operators have the "competency and reliability and
expertise" to operate a hazardous waste facility, said Harry Sarvis,
a manager with the Ohio EPA’s division of hazardous waste
management.
The state requires fingerprints because those who
have committed at least one of 21 crimes - including securities
fraud and forgery - can be prohibited from being landfill owners,
Mr. Sarvis said.
"The policy of the state is to make sure
that the waste disposal industry is scrupulously clean," said Mark
Gribben, a spokesman for state Attorney General Jim Petro.
A
Toledo attorney representing Envirosafe Services of Ohio, Inc., said
the state has all the information it needs about the landfill’s
owners.
"We do know we disclosed everyone with involvement of
the facility," said Richard Sargeant, an attorney with Eastman &
Smith.
Mr. Sargeant said GSC Partners are so removed from the
operations and management of the Oregon landfill, there is no reason
to supply information about them to the state.
"Envirosafe
Services of Ohio is the group of people who run the facility. GSC
Partners doesn’t interest themselves in us," he
said.
Officers of GSC Partners didn’t return messages seeking
comment.
A former Ohio Environmental Protection Agency
administrator said the state needs to know more than what has been
disclosed about Envirosafe’s new owners.
"This company should
be totally transparent about who they are," said Gerry Ioannides,
who served on the state Hazardous Waste Facility Board in 1991 when
it approved an expansion of the Envirosafe landfill. "We issued the
permit based on the trust of the people who came before us. You
can’t issue a permit if we really don’t know who the owners
are."
Judy Junga, a Toledo resident and an Envirosafe
watchdog who for years has pushed state officials to better monitor
the Oregon landfill, said the state should insist that GSC Partners
discloses details about its ownership and provide all fingerprints
of directors, officers, and key employees.
"The people who
run the Envirosafe facility were given a permit under Ohio law. If
they don’t want to comply with all of Ohio law, let them send their
trucks and train cars and dig out all the stuff they have dumped in
our backyard - next to Toledo’s water lines - and take it all back
and dump it in the backyards of the people who own this facility,"
she said.
Toledo’s water intake lines, which transport water
from Lake Erie to the city’s water-treatment plant in East Toledo,
run between hazardous waste pits. They are monitored by city
officials to assure no landfill contamination enters the
lines.
Envirosource officials have told the state, "Entities
managed by" GSC Partners own 70.6 percent of the outstanding stock
and notes of Envirosource.
"We have no other current
information as to who owns Envirosource stock and notes," wrote John
Minihan, assistant general counsel of Envirosource.
Eastman
& Smith gave the state an organizational chart that shows
Fairlane Management Corp. as the parent company of Envirosafe
Services of Ohio. Fairlane was incorporated Oct. 3, 2002, in
Delaware.
GSC Partners’ portfolio includes 70.6 percent of
the shares of Fairlane Management Corp, but Eastman & Smith has
told the state it can’t identify the owners of the remaining 29.4
percent of the shares of Fairlane.
The reason? The stock and
notes are "held in street name," which refers to trust companies
that hold stock on behalf of owners, said Mr. Sargeant, the Eastman
& Smith attorney.
Because Fairlane is a private company,
the U.S. Securities and Exchange Commission cannot require the
owners to reveal their identities, he said.
Even so, the
attorney general’s office has repeated its request for more details
on ownership.
Eastman & Smith has asked the state to
waive the request for information about GSC Partners, saying it
isn’t involved in managing Envirosafe Services of Ohio.
The
attorney general’s office has forwarded the investigative report to
the Ohio EPA for review. EPA Director Chris Jones has authority to
revoke permits based on the findings of a background investigation,
Mr. Sarvis said.
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