W.R. Grace & Co. says it is target of a federal probe

BALTIMORE (AP) — W.R. Grace & Co. and several of its senior-level employees are the targets of a federal grand jury investigation relating to possible violations of environmental laws in Montana, the company said Friday.

The company also said it has been named as a target of the grand jury in Montana involving possible obstruction of federal agency proceedings and conspiring with others to violate federal environmental laws.

"Grace believes that the investigation is related to its former vermiculite mining and processing activities in Libby, Mont.," the company said in a statement.

Greg Euston, a company spokesman, declined to comment further. The U.S. attorney's office in Billings, Mont., did not immediately return a call seeking comment.

The U.S. Environmental Protection Agency arrived in Libby in November 1999, after national news reports linked asbestos contamination from a vermiculite mine just outside town to the deaths of nearly 200 people and illness in hundreds more. Vermiculite, which was used to make insulation, is a naturally occurring mineral that expands into accordion-shaped pieces when heated and is lightweight and fire-resistant.

"Grace has not been advised of any details about the possible violations of law and is unable to assess at this point whether the results of this investigation will be material to Grace," the company's statement said.

Grace bought the mining operation — which once supplied more than 80 percent of the world's vermiculite — in 1963 and shut it down in 1990. The federal government has said ore from the site is contaminated with asbestos fibers, which were spread through the town as it was mined and processed.

Several current and former senior-level employees associated with the company's construction products business also have been named as targets of the investigation, the company's statement said. have been named as targets of the investigation, the company's statement said.

The EPA filed a lawsuit against Grace in March 2001 to recover cleanup costs in the area, which the agency has declared a Superfund site. EPA is working to remove asbestos from soil and buildings at the mine site and in town.

In April, the company appealed a federal judge's ruling that it must pay the EPA the full $54.5 million for asbestos cleanup in Libby, along with any future costs. The company filed for bankruptcy in 2001.

Before Molloy's ruling, W.R. Grace and a subsidiary had agreed to pay nearly $33 million for work done from November 1999 through December 2001, but Grace disputed another $21.5 million in costs.

Grace is a leading global supplier of catalysts and silica products, specialty construction chemicals, building materials, and sealants and coatings.

Shares of W.R. Grace closed up 7 cents at $10.72 in trading Friday on the New York Stock Exchange.