DHEC to review hidden AVX data in Myrtle Beach

Officials to look for criminal activities

dwren@thesunnews.comMarch 6, 2011 

RANDALL HILL — The Sun News Buy Photo

  • What happened | Horry Land Co. discovered trichloroethylene - or TCE - contamination in groundwater at its 17th Avenue South site in 2006 while performing environmental studies in advance of plans to market the property. State regulators determined the contamination migrated from the adjoining AVX Corp. manufacturing plant. TCE was discovered at levels as high as 18,200 parts per billion in a roughly 10-block neighborhood near AVX. Federal regulations say TCE concentrations cannot exceed 5 parts per billion.

    Horry Land lawsuit | Horry Land Co. sued AVX in state court in October 2007, seeking more than $5 million in compensation for alleged lost property values. The lawsuit was moved to federal court the following month. The U.S. Air Force was added as a defendant in June 2009 after AVX claimed some of the pollution could have come from the adjacent Myrtle Beach Air Force Base. The military denies it is responsible for any of the pollution on Horry Land's property.

    Other lawsuits | A group of residents in the neighborhood where contaminated groundwater exists have filed a class-action lawsuit against AVX, claiming the pollution has ruined property values and made it impossible for them to sell their homes. Another lawsuit was filed in state court by a developer who claimed the polluted groundwater ruined plans for a condominium project near AVX. Both lawsuits are pending.

    What's next | AVX and Horry Land reached a confidential settlement agreement last week. The manufacturer's claims against the military should be decided this week. A federal judge now is hearing AVX's claims that the U.S. military contributed to the pollution. If a judge rules in favor of AVX in that phase, he then will determine what portion of the cleanup costs each party should bear.

— The S.C. Department of Health and Environmental Control will review documents that AVX Corp. kept hidden for nearly 30 years to see if it warrants a criminal investigation of the company and its executives.

The documents - revealed for the first time during an ongoing civil trial in federal court here - show AVX officials knew as early as June 1981 that a toxic degreaser called trichloroethylene was potentially spreading through groundwater from the manufacturer's site to adjacent properties, threatening city and private wells and the Pee Dee aquifer.

That contamination has since spread to groundwater in a roughly 10-block Myrtle Beach neighborhood northeast of AVX's plant on 17th Avenue South.

Despite consultants' repeated warnings that testing was necessary, court testimony shows the company did nothing for decades to determine whether the pollution was a threat to its neighbors.

"We will be looking at the information and documents from the civil case to see if further investigation on our part is warranted," DHEC spokesman Thom Berry told The Sun News last week.

The possible focus of such an investigation could be whether AVX was criminally negligent because it refused to address the threat to adjoining properties. Another focus could be whether AVX executives conspired to cover up the threat.

Dennis Oldland, the environment and safety manager for AVX, could not be reached for comment.

Mark Plowden, a spokesman for S.C. Attorney General Alan Wilson, said there is no statute of limitations for criminal violations of state environmental laws.

"A criminal investigation could commence at any time, if warranted," Plowden said.

An S.C. law passed in 2005 gives the state grand jury the power to investigate environmental crimes. The grand jury has broader powers than DHEC because it can subpoena information and testimony.

The law requires at least $2 million of environmental damage before a state grand jury can be impaneled. AVX testified in the civil court trial that cleanup of just a portion of the contaminated property will cost at least $6 million.

Contradictions

The law also requires proof that the alleged environmental crime was committed "knowing and willfully."

The 1,500 pages of previously secret documents show AVX knew pollution was spreading but chose not to report it or take action to stop the spread.

The documents - including consultants' reports and insurance company inspections - also directly contradict statements AVX made to state regulators in 1995, when the company first reported contamination on its site after spending the previous 14 years secretly trying to clean up the pollution.

AVX presented a report to DHEC in 1995 that stated the pollution was contained within the manufacturer's boundaries.

AVX executives knew that was not true, according to the civil court hearings, because the company's consultants told them throughout the 1980s that the pollution was moving offsite.

In one report, AVX consultant Post Buckley Schuh and Jernigan Inc. told the company that high levels of carcinogenic contamination was moving through groundwater toward the Atlantic Ocean and there was a risk of residents using the contaminated water for irrigation and other purposes.

Another report in 1983 stated that TCE was migrating from the company's site to adjoining properties at less than five pounds per day.

Oldland, during testimony in the civil trial, said AVX did not report the contamination because the company felt it could clean it up privately. Oldland also said the amount of TCE moving off AVX's property appeared to be below the government's threshold that would require reporting.

The documents show AVX officials knew the company had potentially violated environmental regulations.

In one report, a consultant tells the company: "We realize the cost of cleanup appears high [but] this cost must be weighed against potential regulatory action and civil liabilities."

The consultant said AVX likely would face a $250,000 fine from regulators for failing to report the TCE contamination.

In other correspondence, a consultant told AVX that it should notify city officials about the spreading contamination and included a copy of the state's Pollution Control Act for reference.

More secrecy

The reports also detail the company's attempts to hide the pollution from others, including state regulators and city officials.

For example, when a consultant investigated possible contamination of private wells on land near AVX, it was done "in a way to avoid arousing suspicions," according to a 1981 report.

The consultant also said that when talking with public officials about possible contamination, "care will be taken to camouflage AVX's identity."

The extent of the contamination on AVX's property during the 1980s was hundreds of thousands of times greater than what federal law now states is the maximum allowable level.

A 1988 report, for example, shows concentrations of TCE and other volatile organic compounds at 711,000 parts per billion at one site on the AVX property. That test was taken two years after AVX stopped using TCE and about seven years after the company started to secretly clean up the property.

It is estimated TCE levels on the manufacturer's property exceeded 1 million parts per billion in the early 1980s. Federal regulators now say the maximum allowable level is five parts per billion.

Back and forth

The previously secret documents apparently were seen by only a few AVX executives. Oldland, who has been with the company since 1984, said he first saw them about a month ago as he was preparing for the civil trial. Larry Blue, the company's senior environmental specialist, also said he had not seen the reports until recently.

DHEC also did not know about the 1980s reports showing TCE migration from AVX to adjacent properties until the civil trial.

DHEC initially accepted the company's assertion that all of the pollution was confined to AVX property. AVX entered into a consent order with the state regulator in 1996, agreeing to clean up its property and pay a $7,000 civil penalty. AVX did not admit to any violations of state or federal laws.

State regulators asked AVX multiple times between 1997 and 2004 to test whether contamination had migrated to adjacent properties, according to court testimony. Each time, the company convinced DHEC that the contamination was limited to the AVX site.

In one instance, state regulators requested that AVX "aggressively attempt to obtain access" to offsite properties for testing. Blue testified that he tried numerous times to contact Larkin Spivey, who he believed represented Horry Land Co., which owns property across the street from AVX.

Spivey testified that he hasn't had an ownership interest in the Horry Land property since 1982 and never received a telephone message from Blue, despite having the same telephone number published in the local directory for 30 years.

Executives with Horry Land Co., which also has a published telephone number, said they never received a telephone call requesting environmental tests from anyone at AVX.

The trials

State legislators said they are happy that DHEC intends to reopen its inquiry into AVX.

"DHEC needs to reopen the investigation to see if any criminal violations occurred in light of the facts that were produced at the civil trial," said state Rep. Tracy Edge, R-North Myrtle Beach.

Sen. Ray Cleary, R-Murrells Inlet, said it "gives me great concern whenever I hear of anybody trying to cover something up." He said if AVX has misled state regulators, a further DHEC investigation is warranted.

Horry Land discovered the TCE pollution on its property in 2006, after conducting its own environmental tests in advance of marketing the property. The tests showed TCE contamination as great as 18,200 parts per billion.

Horry Land sued AVX over the contamination in 2007 and reached a confidential settlement with the manufacturer last week during the civil trial.

That trial now is in a second phase, in which Judge Terry Wooten will determine whether the U.S. military - which once operated the nearby Myrtle Beach Air Force Base - contributed to contamination on Horry Land property and, if so, how much of the cleanup costs it should pay. The trial is expected to conclude this week.

AVX - which moved its world headquarters from Myrtle Beach to Greenville in 2009 - had tried to keep the documents from coming out in the civil trial, but a federal judge last year ruled that Horry Land had the right to view them. The documents became public when they were introduced as evidence in the trial.

Federal regulators say TCE has been shown to cause cancer, but the pollution on Horry Land's site and in the 10-block neighborhood is not considered a health hazard because it is not used for drinking water.

Even though it is not a drinking source, the U.S. Environmental Protection Agency requires that the groundwater's TCE levels be reduced to no more than five parts per billion. A part per billion is a scientific measurement equivalent to 3 seconds out of a century.

Experts disagree over how long it will take to clean up the groundwater near AVX. The company's consultants say it can be cleaned within five years, while Horry Land's consultants say a cleanup could take decades.

AVX has been paying for studies to determine the best way to clean up the pollution and expects to use a process called enhanced reductive chlorination, in which a substance similar to molasses is injected into the groundwater. The molasses-like mixture creates bacteria that eat the TCE, breaking it down into harmless matter.

Call DAVID WREN at 626-0281.

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