February 6, 2007

Lord Stevenson of Coddenham CBE, Chairman
House of Lords Appointments Commission
35 Great Smith Street
London SW1P 3BQ

Dear Lord Stevenson:

I am writing on behalf of Ohio Citizen Action, a 32-year old public interest organization with 100,000 dues-paying members.

Your Commission may soon be required to vet Lakshmi Mittal for a seat in the House of Lords. Our interest is that many of our members are neighbors of Mittal Steel’s massive Cleveland Works, and are suffering from his negligence.

The Independent recently reported that “Tony Blair is considering honouring Britain's richest resident, who last week made a £2m donation to the Labour Party, according to Whitehall sources. The Prime Minister is said to be debating whether to include Lakshmi Mittal in the resignation honours list when he stands down. Mr. Blair is understood to be considering names for the list which, it has now been agreed, will be vetted by the House of Lords appointments watchdog. The Prime Minister would have the power to award a knighthood or even a peerage to Mr. Mittal, who, although he has an Indian passport, would be entitled to sit in the Lords as a Commonwealth citizen” (January 21, 2007).

I understand that your vetting concerns propriety, community standing, and credibility, not suitability. As your most recent Annual Report states, “The Commission’s main criterion in assessing this is whether the appointment would diminish the workings and the reputation of the House of Lords itself and the appointments system generally.”

These considerations are pertinent. The dealings between Messrs. Blair and Mittal parallels that of Lloyd George and the notorious South Africa mine-owner Joseph Robinson:
The sale of honours became particularly blatant and reckless under Lloyd George. The reason was that while he had won the 1918 general election he had broken with the Liberal Party, the coalition government he headed having a Conservative majority. In order to fight the next election he needed to found his own political party, which would need an enormous campaign fund. To sell the necessary honours he set up a brokerage system with a go-between, J. Maundy Gregory, who would have a near monopoly on official patronage. Lloyd George was the first Prime Minister to set fees for the sale of honours, which were publicly revealed by the Duke of Northumberland in the House of Lords on July 17, 1922: £10-12,000 for a knighthood, £35-40,000 for a baronetcy.

King George V was, according to one of his biographers, seriously disturbed concerning four aspects of the distribution of honours in the period 1917-22: "They were the failure of the Prime Minister to consult him before promising titles to certain political and financial supporters; the number of honours recommended by the Prime Minister; the character of the recipients; and the use of go-betweens to sell the royal prerogative in the market-place."

Despite the misgivings felt from the King down, things did not come to a head until the Robinson scandal. The honours list published to mark the King's birthday on June 3, 1922 included the names of five new peers, of which four were met with derision. The most controversial was the South African mine-owner Sir Joseph Robinson, who had paid £30,000 for his peerage. He had chaired a company to which he had sold, at an inflated price, mining freeholds, which he had previously bought in his own name. The South African courts had ordered him to pay £500,000 compensation and his appeal to the Judicial Committee of the Privy Council was lost in November 1921.

The Lords, some of whom had sat in judgment on him, were furious at this new addition to their number, Lord Harris laying before them all the details concerning Robinson on June 22, 1922. The King was also furious and the storm was such that Lloyd George forced Robinson to decline the honour. This brought the scandal of the sale of honours to the surface and was a factor in Lloyd George's fall from power.

Irish Student Law Review, Honorable Society of King's Inns, Dublin, Ireland, 1999 (http://www.islr.ie/Reviews/1999/republicans.php).
I will not address here the issue of whether a quid pro quo is involved in Mr. Blair’s consideration of Mr. Mittal for a seat in the House of Lords. I presume you will have plenty of evidence on that from the local news media and law enforcement authorities.

I bring to your attention his behavior as a businessman.

By way of background, many of Ohio Citizen Action’s members live in Ohio’s most populous county, Cuyahoga County. By far, the worst polluter in Cuyahoga County is Mittal Steel’s Cleveland Works steel complex. Approximately 390,000 people and half of Cleveland’s public schools are within five miles of the complex. Mittal Steel Cleveland has more near-neighbors than any other steel plant in the United States.

The Cleveland Works, a ninety-year-old plant, went bankrupt twice when it was owned by LTV Steel (1984-2002) and was closed for a year and a half (2001-2002). The mill now manufactures steel and soot, sulfur dioxide, and other chemicals that can trigger asthma and cause cancer. The volume of these emissions is increasing, by 38% from 2003 to 2004 alone. Of the air pollution control devices used at Mittal Steel, the oldest dates to 1943. Most were installed in the 1970s and 1980s, and the newest was installed in 1990.

A recent citizens audit of the Cleveland Works found that neither Mittal, nor the state or federal environmental protection agencies know the full scope of how much pollution the Cleveland Works is putting out because Mittal Steel is not even measuring the pollution from its Cleveland blast furnaces -- the facility’s biggest sources of fine and coarse particle pollution, sulfur dioxide, carbon monoxide, volatile organic compounds, and organic chemicals.

Neighbors of Mittal Steel‘s Cleveland Works are suffering from this pollution -- metal flakes on their homes, cars, and children; headaches from rotten egg smells; zinc and manganese found on and inside their homes.

Denise Denham and Donna Levandowski are Mittal Steel neighbors in the Slavic Village community next to the plant. Here is their testimony of what it is like to live next to Mr. Mittal’s factory:
We’ve grown up in this house next to the Cleveland Works our entire lives, but something has been very different in the past five years. It’s not just our own personal health problems that we notice or the damage that pollution causes to our house and cars, but our children are sick, too.

The oldest of our three kids is Denise’s son, Craig, age ten. He developed asthma about five years ago. It gets bad when the air is bad, and so he’ll have to use his breathing treatments. You can usually tell by the way he’s breathing. Sometimes his asthma gets so bad he’ll have to take steroids. He has constant ear infections too, and if you don’t get rid of them fast enough, they’ll aggravate his asthma. Craig has allergies and eczema, too.

Donna’s two-year-old son Jimmy also has eczema. And, every time he comes in from playing out in the grass, he has a blotchy skin rash. The cream we use on him is so strong, the doctors said what it does is literally thin his skin out. Jimmy has asthma and allergies. For Jimmy’s asthma, he has to take his breathing treatments two to three times a day.

Donna’s daughter Joie is seven years old. She’s got the allergies and asthma just like the boys. She also gets real bad headaches. One time back in the spring, Donna took her to the emergency room because her head hurt so badly.

That’s what we suffer from the most too – migraine headaches. We’re both on migraine medication for the rest of our lives. Donna has tried to get off hers before but she ended up in the emergency room. Her medications are real strong too; they cause some memory loss and her pulmonary function test has come back high from taking them. We both started having asthma in the past five to six years. It’s induced asthma. Denise has problems with her sinuses and nausea too.

We’ve taken ourselves and our kids to see the doctors at an environmental health clinic. They recommended that our children shouldn’t play outside because of the heavy metals in the grass and soil. Our urine tests came back with some high levels for copper, arsenic, manganese, lead, zinc, mercury, and alkaline phosphates. These are the same pollutants coming from the mill.

The doctors asked if we were going to relocate our families, because their health is more important than this house. We sure wish we could but we can’t afford to, and we know the steel mill won’t pay for it.
Mittal’s reckless operation of this plant is combined with a refusal to communicate with the people living with the consequences. Ohio Citizen Action members have sent 25,627 personal handwritten letters and petitions to Mittal Steel executives, without a single reply.

An Ohio Citizen Action volunteer also hand delivered 458 drinking straws to Mr. Mittal’s London headquarters in June 2005. Messages on the straws read:
Dear Mr. Mittal:

Please breathe through this straw for 60 seconds to see what it is like to have asthma. Pollutants from the Mittal Cleveland Works aggravate asthma for the 390,000 residents who live within five miles of the plant. Did you know that this plant's emissions of sulfur dioxide and small particulates, which can trigger asthma, increased by 38% from 2003 to 2004? It's time for you to invest in modernizing the Cleveland Works Plant to prevent pollution.
The package also included a letter from Tremont community leaders inviting Lakshmi Mittal to meet with them. None of the Tremont leaders ever heard back from Mr. Mittal.

To this date, no Mittal Steel executive with decision-making authority has spoken with Mittal’s neighbors in Cleveland.

Mr. Mittal’s recklessness is not limited to Cleveland:
  • “ALMATY, Kazakhstan -- The Kazakh president's influential daughter said her party had drafted a bill to toughen punishment for labor violations in response to a blast that killed 41 workers at a Mittal Steel-owned mine, according to an article published Friday. Lawmaker Dariga Nazarbayeva, President Nursultan Nazarbayev's eldest daughter, said the September explosion had resulted from neglect of safety rules, and criticized the government for failing to stand up to foreign corporations in the article published in Caravan magazine. ‘Kazakhstan should not act like an obedient colony that bows to yet another foreign master listed in Forbes magazine,’ Nazarbayeva said in a reference to Mittal's multibillionaire owner, Lakshmi Mittal. Nazarbayeva said her party, Asar, has already drafted amendments to the labor code that envisage ‘draconian’ punishment for employers violating the labor legislation. The methane gas explosion at Mittal's Lenin mine was caused by a breach of safety rules, authorities concluded. The miners held a weeklong strike in early October demanding better working conditions and higher wages.” (“Kazakh Pres’ Daughter Seeks Tough Law On Labor Violations,” Associated Press, October 20, 2006).
  • News reports have for months followed the growing protest by tribal and political organizations in the Kolhan region of Jharkhand, India, where Mittal Steel and other firms plan widespread displacement of neighbors, thus also depriving them of their livelihood. In economic terms, the current residents of these sites are being forced to bear a significant part of Mittal’s costs, thus allowing him to underprice his steel.
  • In June 2005, Mittal Steel won the Sustainable Catastrophe Award at an event hosted by the Center for Civil Society and Groundwork in South Africa. The nomination explained why Mittal deserved this honor: “Mittal’s steel making plant at Vanderbijlpark is responsible for the longest running continuous environmental incident in South Africa. It has been draining toxics into the groundwater since 1952 when it built evaporation dams to hold its liquid effluent. The dams, covering two square kilometres, were simply dug out of the earth without a lining to keep the effluent separate from groundwater. This is compounded by poisons that leach into the groundwater from massive slag heaps covering about 100 hectares and by a drainage system that allows storm water and effluent to mix. The plant is owned by Mittal Steel, the world’s biggest steel corporation, following its take-over of the South African corporation Iscor. It was nominated by the Vaal Environmental Justice Alliance, Friends of Steel Valley, the Steel Valley Crisis Committee, Earthlife Africa, the Environmental Justice Networking Forum, and Jubilee South Africa. The quantity of water in Mittal’s effluent dams has raised the water table even as it poisons it. The poison plume containing cadmium, lead and other cancer causing substances is now estimated to stretch over 10 square kilometres. These poisons have shown up in blood tests taken from neighboring people and smallholder farming in Steel Valley has been wiped out as stock animals died and vegetables irrigated from boreholes were contaminated. The deal which handed Iscor to Mittal in 2004 involved a massive transfer of wealth to corporate boss Lakshmi Mittal. In contrast to this transfer of wealth to the rich, Iscor has cut 30,000 jobs in the last 10 years.”
  • The Puls Biznesu newspaper in Warsaw, Poland, reported recently “The Supreme Chamber of Control criticized the Ministry of the Treasury for the privatization of the steel industry. Control authorities NIK said in a report published yesterday that PHS, today Mittal Steel Poland, were sold too cheaply. The state could lose even PLN 2 billion (EUR 510.2m) in the privatization transaction. The case has already been filed to the Prosecutor's office,” (“State sold steel plants too cheaply, control authorities say,” http://www.pb.pl/news,145,dc5a9839-b1d7-49c3-9669-f661d9b84d61.aspx, January 26, 2007).
Should Mr. Mittal’s name be put forward, we respectfully suggest that in your deliberations, you --
  • Examine the foregoing evidence, and solicit oral or written testimony from Mittal Steel employees and neighbors concerning Mr. Mittal’s “integrity in relation to his working life.” We would be happy to appear before your Commission, and provide names and contact information of others who can supply the information you need.
  • Include in your “media check” a review of the media of the countries where Mr. Mittal’s steel operations are located, especially the United States, South Africa, Poland, Kazakhstan, and India.
  • Investigate the degree to which Mr. Mittal has “complied, in a straightforward way, with [his] obligations in relation to taxation” in light of last December’s findings by the Grant Thornton accounting firm. According to a press report, the United Kingdom's 54 billionaires "paid income tax totaling just £14.7 million on their £126 billion combined fortunes, and only a handful paid any capital gains tax. At least 32 of the individual billionaires or family groupings are calculated not to have paid any personal taxes on their fortunes, although they are liable for VAT and council tax” (“Britain: world's first onshore tax haven: Billionaires pay out tiny fraction of wealth,” Robert Winnett and Holly Watt, Sunday Times, December 3, 2006; http://business.timesonline.co.uk/tol/business/law/corporate/article658376.ece).
  • Consider both sides of the 2002 Mittalgate scandal. Most prominent was the relationship between Mr. Blair’s actions and Mr. Mittal’s political contributions. Even if you find no quid pro quo, the other side of the scandal was Mittal’s pressure on Mr. Blair to use the British government to benefit his Romanian business interests at the expense of British jobs. This conflict of interest would persist should Mr. Mittal take a seat in the House of Lords.

Thank you for your consideration.

Yours sincerely,

Sandy Buchanan
Executive Director
(216) 861-5200

Enclosures:
Citizens Audit of Mittal Steel (161 KB pdf), January 3, 2007
Sandy Buchanan letter to Her Majesty Queen Elizabeth, February 6, 2007