From Cold Warrior to nuclear waste custodian: RMI's 40-year legacy of devouring public funds

Sweet Life at the Trough 

From Cold Warrior to nuclear waste custodian: RMI's 40-year legacy of devouring public funds

The pitched battle over nuclear waste intensified as the Cold War waned in the 1980s, and Chris Trepal wanted to enlist on Earth's side. After listening to a Greenpeace activist on Donahue one day back in 1985, she dialed up the Northeast Ohio Sierra Club. Soon, the mother of two was waist-deep in the cause: poring over documents, meeting with volunteers, phoning residents. Anything to spread the word.

When she started, Trepal knew almost nothing about Reactive Metals Incorporated in Ashtabula. RMI, under a federal contract that paid it as much as $9 million annually, produced uranium metal tubes that could be converted into plutonium for nuclear weapons. Like the rest of the nuclear industrial complex, the company took pride in aiding an arms buildup that ultimately would help shred the Iron Curtain.

But as the country learned, the industry -- under a veil of secrecy, ignorance, and expediency -- also made a casualty of the land. RMI proved typical, releasing at least four tons of uranium into the surrounding environs between 1962 and 1988, according to federal reports. Fields Brook, a Lake Erie tributary that flows past RMI and a string of other Ashtabula factories, became an industrial sewer -- and, in time, a Superfund site.

So when RMI requested federal permission in 1989 to store hazardous materials at the plant, Trepal and a small band of crusaders mobilized. A state health study already had uncovered high rates of brain and other cancers among people living near Fields Brook. Activists, arguing that keeping waste at RMI would further endanger residents, lobbied for the plant's closure.

The U.S. Department of Energy delivered their wish, halting production in 1990. Environmentalists were thrilled -- they had lopped off the dragon's head. "It was a good feeling," Trepal says.

Until the dragon sprouted a new head.

Revealing an acute instinct for self-preservation, RMI, a division of Niles-based RMI Titanium Company, soon reinvented itself as a toxic waste cleanup venture. Its purpose: to win the lucrative job of decontaminating its own site. The strategy worked. In 1993, the DOE awarded RMI a no-bid, $237 million contract to sponge up the very mess it spent 28 years making.

The decision to let the company double-dip in the public trough sparked little reaction -- green forces were waging other battles by then. But recent history suggests that as RMI builds on a 40-year legacy of devouring public money, the company has a much greater capacity for producing waste than disposing of it.

Last September, the Nuclear Regulatory Commission proposed fining RMI for its alleged retaliation against a whistle-blower who accused the company of improperly handling radioactive materials. Two months later, the DOE issued a report that criticized RMI for squandering almost $5 million in federal funds on equipment it scarcely uses. And a report released last month shows the project, once slated for completion by as early as next year, could drag on into 2012, pushing cleanup costs past $300 million.

The troubles bring a shake of the head from Trepal, now executive director of the Earth Day Coalition in Cleveland.

"First, [RMI] made a boatload of money on nuclear weapons. Now it's all these years later, and they're making a boatload of money cleaning up and not doing a very good job. They haven't changed."


In the early 1960s, with the Cold War at subzero, the Atomic Energy Commission sought a home for a 3,850-ton extrusion press. The press shaped narrow metal bars of uranium, called billets, into tubes that could be converted into weapons-grade plutonium.

RMI agreed to install the press at one of its three Ashtabula plants, joining the fight against the Red Menace. The company received between $2 million and $9 million a year for the next quarter-century; in return, the government got more than 100,000 tons of uranium billets. A sweetener in the contract allowed the company to use the press to extrude aluminum, copper, and other metals for commercial sale.

The number of workers at the plant swelled during the arms buildup of the Reagan years, rising from 58 in 1972 to twice that many by the mid-'80s. A similar bulge occurred at nuclear manufacturing sites nationwide.

Yet while the Soviet Union's collapse in the late '80s brought a global sigh of relief, it stirred anxiety within the nuclear industry. As demand for high-tech weaponry ebbed, plants faced huge layoffs. Their dilemma emerged at the same time the government began to own up to the ecological fallout of its decades-long weapons binge.

With workers needing jobs and the environment needing love, a two-for-one solution was born, says Tom Williams, the DOE's project manager on the RMI site.

"When the Cold War effort ended, the thinking was there should be some sort of accommodation for the companies and workers that eventually won the war. The government wanted to help them transition into other industries, and cleanup is one of those."

RMI exploited the circumstances with a mix of savvy and pugnacity.

In 1988, as production at the facility wound down, the DOE hired Westinghouse Environmental Management Company to supplant RMI as the on-site contractor. The presence of Westinghouse, recruited for its experience in cleaning up hazardous waste, relegated RMI to subcontractor status. The relationship didn't last; RMI reacted to the demotion like a child stripped of his Game Boy.

As a private company, RMI stood distinct from the government-owned facilities that made up most of the early-era nuclear industry. At those sites, among them the massive uranium-processing plant in Fernald, Ohio, the DOE handpicked contractors to run the factories as well as decontaminate them.

But RMI owned its 25-acre property and 13 of the 25 structures on site. The company contended that it retained dibs on performing the cleanup under terms of its DOE pact. And since contamination of the land came in service of country, the company's logic went, the government owed RMI and its employees.

In fact, a copy of the contract shows that the DOE, while obligated to cover the cleanup tab, ostensibly held discretion to pick any contractor.

RMI forged ahead anyway. In 1991, it lodged three complaints with the DOE's contracting office, seeking $27 million in damages for loss of the extrusion contract, commercial business, and cleanup fees. (Never mind that all three, to one degree or another, were made possible by government-owned equipment.) When the DOE awarded the company less than $500,000 two years later, RMI sued the agency and Westinghouse for $150 million, accusing both of thwarting its right to oversee the cleanup.

Instead of burning more time and money on a bureaucratic spat, the DOE caved. The agency jettisoned Westinghouse and, without opening the process to outside bidders, gave the cleanup contract to the newly rechristened RMI Environmental Services. The company said thanks by continuing with the lawsuit -- which it eventually lost.


Though reinstating RMI as the contractor "solved" one problem, left open was the far bigger matter of the company's fitness for the job.

Management plunged into the business of radioactive waste cleanup by retraining its workforce. The company also switched its name a second time, to Earthline Technologies, after the DOE urged it to cultivate a more eco-cuddly image.

But the changes fail to mask what Williams describes as the company's "limited expertise" in decontamination -- or what anti-nuclear activists call outright ineptitude.

Williams has monitored the project for the DOE since 2000 and credits RMI with improved performance in the past year. He's more circumspect when gauging the company's ongoing disposal of 40,000 tons of contaminated soil, untold tons of building materials, and demolition of 21 of the site's structures.

"I'm much happier with where things are than I would have been three years ago," he says. "[But] I can't say a small company in Northeast Ohio is the most qualified environmental restoration company in the country."

Kenneth Morgan, spokesman for the DOE's Ohio office, treads less lightly. "RMI is a small company, and they've had a pretty steep learning curve. They're not at the top of the list in handling this sort of cleanup."

In offering a soft-spoken defense of his company, Division Manager Jim Henderson gives the impression he'd rather not talk at all, his voice barely rising above the hum of the heating vents in his office.

"Thirty, forty years ago, this kind of work didn't exist," says Henderson, who wears a white shirt, dark slacks, and a Fred MacMurray hairstyle straight out of 1971, the year he joined RMI. "Every company has had to make a transition and adapt."

Henderson insists that RMI remains the best company for the task, given its familiarity with the site and handling uranium. Still, he concedes, "It's taken longer than the company ever anticipated it would take."

The sluggish pace provokes thorny questions over whether the DOE blundered in wresting the mop from Westinghouse.

Sticking with Westinghouse over RMI would have cost the government more money, the DOE's Morgan argues, owing to the friction between the two companies and the resistance of workers to a new boss. Similar reasoning explains the agency's handing out of no-bid contracts, he says.

"If you spill the milk in the kitchen, who's the best person to clean it up? Probably you, because of the difficulty of bringing in a new contractor."

The lesser-of-two-evils rationale infuriates nuclear industry foes. They complain that the DOE, by permitting companies like RMI to continue suckling on the government teat, keeps commercial interests ahead of ecological and health concerns. "The DOE is creating new messes out of their cleanup projects," says Arjun Makhijani, president of the Maryland-based Institute for Energy and Environmental Research. "By hiring the same company, you're hiring the same culture. The only cleanup that is happening is of taxpayers' dollars."

RMI is one of several companies profiting from its own nuclear waste. Columbus-based Battelle will receive $260 million -- also from a no-bid contract -- to decontaminate its retired uranium-processing plants in Columbus and West Jefferson; the DOE will drop another $30 million on additional work at the site.

The DOE faces an unavoidable catch-22, in that former nuclear waste producers dominate the budding field of nuclear waste cleanup. Yet Jim Werner, who headed the agency's environmental management program under President Clinton, advocates open bidding for all contracts. He also says enforcing stricter performance guidelines would guard against project delays. The temptation now is for a private company -- realizing its infrastructure will lose usefulness once a cleanup ends -- to prolong a project.

The DOE has yet to show an appetite for either reform, burdened by a bureaucracy that still emphasizes production over cleanup. "And it's not changing quickly," Werner says.


The most remarkable aspect of the RMI warehouse that once housed the extrusion press is how unremarkable it looks.

Set in the middle of the RMI complex, the building appears no more fortified than a Home Depot, with corrugated metal walls in the style of backyard sheds. Forklifts kick up a haze of dust as workers stack pallets and arrange black barrels of low-level radioactive waste that await removal. The aging structure is a slowly emptying husk, destined for demolition later this year.

RMI still employs about 120 people, though most hold desk jobs. Only 17 work on the plant floor, with subcontractors handling more than half of the project.

Ivory Hood, whose 31 years on the job make him the floor's elder statesman, recalls that his protective gear used to consist of the T-shirt and jeans he wore to work. Most workers abstained from the filter masks and gloves made available to them, gripping uranium billets with bare hands.

The casual atmosphere reflected industry standards of 20 years ago, as much as current safeguards -- mandatory smocks and gloves, radiation monitors -- mark today's regulations. But longtime employees say they know of only two or three workers who later developed chronic illnesses that they blamed on RMI, and health studies have never established a link. Hood, who's suffered no serious ailments over the years, absolves the company for past conditions.

"That's the way things were. It wasn't any different anywhere else."

Jim Notte, a 24-year employee and president of Steelworkers Local 6698, feels likewise. "I'm convinced management is doing everything it can to protect us and run a safe operation. In the old days, they weren't -- but they weren't required to."

Yet a recent Nuclear Regulatory Commission report arouses doubt about how much RMI has changed.

Last fall, the NRC proposed a $17,600 fine against the company for alleged discrimination of employee James Lewis, who raised concerns about its handling of radioactive pipe.

NRC documents detail how Lewis, a technician, alerted his supervisor in July 1998 after noticing sections of a uranium-tainted drainpipe stored in an unrestricted area. The supervisor consulted with two managers but "failed to act," according to the NRC, and the pipe was sold to an unsuspecting scrap dealer. (It was later retrieved.)

Lewis continued to warn his bosses about safety matters until February 12, 1999, when management placed him on involuntary leave, the commission reported. The same day, Henderson distributed a memo ordering employees to avoid talking with Lewis about company business. Lewis left RMI a short time later.

The alleged retaliation prompted the NRC to double its base penalty of $8,800 -- a message to RMI management to foster a workplace "free of any chilling effect." But in crediting the company for recovering the pipe, the commission levied no fines for the storage and removal violations -- violations that, ironically, might never have surfaced without Lewis's speaking up.

Lewis, who declined to comment on the flap, has since found a new job. He plans to sue RMI this year after withdrawing an earlier suit because of illness in his attorney's family. In that case, he claimed ostracism sowed by management -- whom he accused of smearing him with allegations of "behavioral problems" -- led him to resign. He sought at least $1.65 million in damages.

Henderson, while refusing to discuss the charges with Scene, submitted a 17-page written response to the NRC. In it, the company asserts that the pipe incident represents the only instance in plant history of improper disposal, and that management was unaware of what occurred. RMI contends that Lewis took several sick days in the month before he was placed on paid leave and endured no disciplinary action prior to quitting.

More tellingly, the statement suggests RMI's readiness to go brass-knuckled on its detractors.

Seeking to stress Lewis's "abnormal behavior and personality swings," RMI variously describes him as "angry and loud," "anxious and distraught," and "rambling . . . and incoherent." In one exchange with a co-worker, "His face reddened." In another with bosses, "His face was pale, and his voice trembled."

The NRC denied RMI's appeal of the fine in January, and the company has until later this month to ask for an administrative law judge to hear the case. DOE officials aren't waiting for the final word: They will withhold $138,000, or 10 percent, of the $1.3 million performance fee due the company this year.

"When people report safety issues, you can't reprise against them," Williams says.

Williams likes to think that blackballing of employees -- alleged or otherwise -- has gone the way of workers clutching uranium in their bare hands. "It's a snapshot in time and doesn't necessarily reflect what management is today." But when it comes to RMI, he's compelled to hedge: "I hope there's nothing else out there this year."


Whether the NRC will unearth more damning allegations remains to be seen. There's no similar guesswork required with the DOE inspector general's office. It has released three audits since November -- with two more evaluations on the way -- that RMI critics point to as proof of what happens when the fox cleans up the henhouse.

Last month, the office -- in a report that reads like a how-to manual on wasting public money -- scorched RMI and DOE officials for cleanup delays and cost overruns. RMI's surpassing of the projected 2003 completion date by as many as nine years will subject "workers and the public to health and safety risks" and could cost an extra $67 million. That would make for a final price tag of $304 million.

According to the audit, the cleanup plan required the company to demolish 21 buildings between 1993 and 2000; only 7 were razed. Incredibly, building space actually increased during that stretch, as RMI tore down four structures and put up three larger ones.

Another January report questioned the efficiency of a $6 million "soil washing" decontamination system that ended up creating additional waste. Those revelations followed a November audit that skewered the company for frittering $4.7 million on the purchase and upgrade of equipment that has largely sat idle at the plant. The report also chided RMI for violating the cleanup contract by advertising government-owned equipment for commercial use.

The DOE's Morgan terms the evaluations "a real embarrassment."

"That's bad management [by RMI], and it's an indication we need to look at their decisions much more closely. It's a black eye on our reputation and theirs."

It's more than a cosmetic blemish, activists fume.

"RMI should be booted from the contract," Trepal says. "How many chances and how much money is [the] DOE going to give them?"

Harvey Wasserman, senior adviser for the Washington, D.C.-based Nuclear Information and Resource Service, scrutinizes the industry from his Columbus office. He blasts the feds for docking the company what amounts to pocket change. RTI International Metals Incorporated, the holding company that owns RMI Titanium, cleared $6.7 million in profits on revenues of $249 million in 2000.

The NRC and DOE's penalties add up to only "enough money to pay for a couple of [RMI] executive vacations. It's nothing," he says. "If [regulatory bodies] want to do the public a service, they should talk about jail time for violators."

An NRC spokeswoman counters that imposing a fine matters less than exposing it. The ugly publicity -- inside the industry as much as elsewhere -- does the rest, potentially harming a company's chances to land other cleanup jobs.

"They don't like all the scrutiny," Morgan adds. "Whether the fine is big or not, it's painful for them."

The discomfort registers as Henderson declines to comment on the DOE reports or on two other violations passed down by the Ohio Bureau of Radiation Protection last August.

The cleanup contract stipulates that the DOE can levy contract fee deductions if the company violates NRC or other regulations. Nonetheless, Williams won't be surprised if RMI sues to collect the $138,000 withheld by the DOE. "RMI is a private company, and it's pretty forthright in asserting its rights."

So why put up with the company?

"We don't change contractors at the drop of a hat," Morgan says. "It's better to work on the performance aspect of the contract and try to get the project completed. That's what the American public needs most."


Joe Pennington spent 20 years as a forge inspector for RMI, retiring in 1986. Then he spent 14 years on kidney dialysis.

His golden years also were marred by partial amputation of his gangrenous left foot, a 72-hour coma, and scleroderma, a disease that hardens the skin and internal organs. A sturdy 5-feet-10 and 180 pounds when he quit working, he had lost three inches and 70 pounds by the time he died in 2000 at age 75.

Pennington and his family suspected that radiation ravaged his body. The difficulty of pinpointing the source of disease, coupled with fear of losing his health insurance, dissuaded him from suing his old employer. But suspicion lingers for his daughter, Tanya Pennington, who still lives in Ashtabula.

"There's never been a doubt. I just wonder how much [RMI] knew all along."

It's not hard to find other residents who feel that toxins lurk within RMI's shadows. No harder than, say, finding people in this small town (population 20,962) who defend the company.

"I don't see anything wrong with them," says Ralph Holsinger, 77. "The way I see it, you need to have money in order to live, and they provide jobs."

He says as much despite belonging to the list of more than three dozen plaintiffs involved in a class-action suit against the company. Residents are suing RMI over a fire that broke out in August 1999 during the dismantling of its old sodium factory near the extrusion plant. A sodium cloud drifted over homes along Lake Erie, forcing evacuation of about 400 residents and leaving some complaining of respiratory illnesses.

Holsinger, who says breathing the fumes fouled up his sinuses, lives in a one-bedroom house in a World War II-era neighborhood a slap shot away from the lake. "I figure they owe something for what happened," he says. "But I'm not really that worked up about it."

A let-live attitude between industry and residents often underpins small towns, in part because manufacturing jobs provide the difference between small town and ghost town. The RMI factory sits along Ashtabula's industrial belt of chemical, energy, and metals plants. Lit up at night, with their stacks billowing steam, the sprawling structures resemble an armada of battered ocean liners. Together, they employ thousands of workers, spur the area's economy, and enchant local officials.

Says City Council President Jo Meisner: "I very much appreciate RMI and the other plants out there and the things they do for the community: the jobs they provide, the money they put into the community, the outreach they do with children and schools."

Similarly, Sam Bucci, a member of the township's board of trustees, prefers to praise RMI for helping to restore Fields Brook, rather than dwell on its role in polluting the stream. RMI and four other companies have chipped in $15 million for the 19-year project, scheduled for completion in March.

"It's hard to blame them for [the contamination] -- the awareness wasn't there," he says.

Devotion to RMI has always run deep, Trepal says. She recalls an incident in the late 1980s, when members from the nonprofit Government Accountability Project drove out to the plant to talk to workers and spent the night at a resident's house. The next morning, they found their car windows smashed.

Still, tremors of anxiety unsettle the relationship between residents and industry. Reports of contaminated fish and an occasional coating of gray or black snow are realities in Ashtabula. Most unnerving for health-conscious residents is the presence of a regional cancer center in their town. In the absence of conclusive studies showing a connection between toxic waste and illness in the area -- a link rarely proven anywhere -- the center says enough.

Stephanie and Robert Laird, who are part of the class-action suit, regard staying in Ashtabula as a kind of Faustian bargain. The couple, with two young children, worry about their family's health -- but this is one town where they can afford a house, cramped as it may be.

"If any of us develop any [physical] problems down the line," Stephanie says, "I know I'll be looking at RMI. I don't think we know everything about what's gone on there."

Tanya Pennington agrees. She stays in Ashtabula because she's lived here for 33 of her 37 years -- and because she believes RMI should be the one to go.

"This is really the only home I've ever known. I shouldn't have to give it up."


Henderson declines to speculate about plans for the RMI property, once the cleanup ends. How quickly the project concludes will hinge on the "healthy tension," to borrow the phrase he and Williams both use, between RMI and the agency. The DOE predicts a 2006 completion. "We want to clean it up and get out," Williams says.

The company estimates 2012.

Regardless of the timeline, if RMI intended to parlay its performance into future cleanup projects, the spate of recent reports and violations would seem to jeopardize its chances. As Wasserman says, "I can't see them getting a lot of offers." In that respect, perhaps the best the company can hope for now is another Cold War.

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