U.S. Water News Online
DENVER -- In an extraordinary legal maneuver, a Canadian court has legally frozen $152 million in stock owned by Summitville mine promoter Robert Friedland after the U.S. Justice Department sued him to finance the failed mine's Superfund cleanup.
The U.S. government's goal is to force Friedland, former chairman of the mining company, to personally pay for the massive detoxification of the southern Colorado mine, which leaked toxic wastes, killed 17 miles of river and forced an emergency takeover by the Environmental Protection Agency in December 1992.
It is highly unusual for the federal government to hold an executive financially responsible for the environmental woes of his company. But Justice Department attorneys said Friedland's close ties to the disastrous Summitville mine justified the action.
"This extraordinary action will help assure that the polluter responsible for environmental contamination pays for cleaning it up," said Lois Schiffer, the assistant attorney general who runs the Justice Department's environment and natural resources division. "People who do business in the United States cannot simply walk away from their environmental legacies with impunity, leaving the burden of cleanup on the American taxpayer."
Friedland is believed to be a citizen of both the United States and Canada, though he recently has also been living in Australia and Singapore. In a statement released by his Vancouver office, Friedland denounced the court action.
The freezing of Friedland's assets was done without his knowledge. In May, the Justice Department persuaded U.S. District Judge Edward Nottingham to keep secret the lawsuit against Friedland, out of concern that he represents "a serious flight risk," and might try to hide financial assets if he learned of the federal lawsuit against him. The secrecy order was lifted only after Canadian courts recently agreed to freeze $152 million of Friedland's assets.
"There was no opportunity to ensure that the court heard fair and balanced argument," Friedland said in his statement. "This is an attempt to impound my property before any of the EPA's claims have been proven at a trial. The agency has never proved that I am legally responsible for any portion of their costs."
In Denver court filings, the Justice Department said Friedland "exercised pervasive control" over Summitville and its parent companies while serving from 1981 to 1990 as a corporate president, chairman, chief executive, officer-director, and largest single stockholder.
The Summitville Consolidated Mining Co. pleaded guilty this year to 40 environmental felonies and was assessed $20 million in fines. Two former company managers remain under federal indictment.
Friedland severed his ties with Summitville in 1990, after the company was cited for a string of environmental violations. Two years later, when the EPA took over the bankrupt Summitville mine, Friedland denied any wrongdoing, maintaining that the key environmental decisions at the mine were made by others. However, federal attorneys cited several memos and testimony by former Friedland associates indicating the executive had much personal knowledge about Summitville's environmental failures.
Friedland now must appeal to U.S. and Canadian courts to get his money back. That will require complicated legal argument under the Superfund law and the Federal Debt Collection Procedures Act.
The Justice Department's court action also was joined by the state of Colorado, which is seeking reimbursement for at least $5 million in regulatory costs at Summitville.
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