A secretive New York tycoon is under fire for leaving a costly mess in Utah that taxpayers may have to clean up. This case involves MagCorp, famously, the nation's number one toxic air polluter.
The magnesium plant's owner has raised many eyebrows over the years. But federal and state regulators are shaking their heads in amazement at his maneuvering over a huge stretch of public land in Tooele County.
Through a maneuver in bankruptcy court, the controversial multi-millionaire seems to have washed his hands of responsibility for 84 square miles of cleanup.
News Specialist John Hollenhorst has details.
MagCorp's vast evaporation facility on public land near the Salt Flats has essentially been abandoned. 84 square miles of canals, equipment, and ponds full of waste salt.
Glenn Carpenter of the U.S. Bureau of Land Management says, "We have some impacts to the environment that I think are unacceptable, I know is unacceptable."
MagCorp is bankrupt. And yet 40 miles east, MagCorp's old magnesium plant continues operating. The plant has a new name, U.S. Magnesium. But indirectly it's the same owner, secretive New York enterpreneur, Ira Rennert.
With the blessing of the bankruptcy court, Rennert has essentially washed his hands of responsibility for a multi-million dollar reclamation project on public land.
"They seem in this case to have trumped environmental laws, which is not supposed to happen," says Mary Ann Wright of the Utah Division of Oil, Gas, and Mining.
Maybe you've heard of Ira Rennert. Or his house. For the last four years he's made waves on Long Island, building an enormous residence said to be worth 100-million dollars.
In regard to the evaporation ponds, his personal fortune now seems untouchable. Here's how it worked: After MagCorp filed bankruptcy, there was open bidding for the plant in bankruptcy court. Another Rennert company bought it. Bought the plant, that is. But not the ponds. They bought the assets without buying the liability to taxpayers.
Carpenter says, "By us having to shoulder the responsibility to take care of this mess, have the people been taken for a ride? You bet!"
Rennert never speaks to the media. But a MagCorp lawyer did. Joseph Smolinsky says the government pushed MagCorp to bankruptcy by insisting on an expensive reclamation bond, and by frivolously seeking millions in unpaid royalties. The bankruptcy worked the way it's supposed to, the lawyer says, limiting the liability of a corporate investor.
"It's to encourage entrepreneurship and investment, by allowing parties to invest in business enterprises without risk that their personal assets would be at risk," Smolinsky says.
"I don't like that mining gets a bac, black eye from this sort of thing," Wright says. "Because other mine owners in Utah don't behave this way."
Carpenter says, "Legally probably going to have to wrestle with himself. And I hope he does."
In a separate battle, the federal government is seeking hundreds of millions of dollars in damages to the environment near the plant itself. In that case, they're pursuing the money from Rennert, not the plant.
Sept. 1, 2002