GE receives taxpayer subsidies while resisting toxic cleanup
Company spends millions on lobbying while delaying restoration work
General Electric (GE) was opposing further plans to clean up carcinogens which it allowed to leak into the Housatonic River, reported the International Business Times in January 2016.
The news broke after the US state of Massachusetts offered GE between US$120 million and US$145 million in taxpayer subsidies to move its corporate headquarters from Connecticut to Boston.
During this period the company was fighting the administration over the details of a plan to cleanup an area the company polluted over the previous decades.
The report said that the Massachusetts governor, Charlie Baker, did not appear to have made the subsidies contingent on GE cleaning up the river - even though his own administration was one of the trustees responsible for restoring the Housatonic River to health.
GE funding political groups
According to the report, Charlie Baker's 2014 election campaign was backed by a GE funded political group, the Republican Governors Association (RGA). During his election cycle the RGA received US$240,000 from GE.
Since 2008, GE and its political action committee had given the RGA US$1.1 million. These subsidies added to the US$1.3 billion in federal and state subsidies that the company and its affiliates had received in the last eight years, even as it employed offshore strategies to lower its state and federal tax bills.
The contamination of the Housatonic River had centred on the town of Pittsfield, which had housed the facility where GE once built transformers and capacitors using polychlorinated biphenyls (PCBs) as a fire retardant.
PCBs are industrial products and chemicals that were banned in the US in 1979 amid suggestions that they could have harmful impacts on human and environmental health.
As PCBs do not easily break down in nature, huge quantities still remain in US waterways. During the time of PCB use, from 1932 to 1977, some of the Pittsfield facility’s pipes and storage tanks had cracked, spewing the oily liquid containing PCBs into the Housatonic River. The company also dumped debris containing PCBs along the riverbanks.
After larger flows of PCB-contaminated oil had been discovered in the groundwater in 1979, GE built a massive pumping machine to suck out the oil. It also rebuilt a dam downstream, under state orders, to contain PCBs already in the river. When residential lots around Pittsfield had begun showing dangerously high levels of PCB contamination in the late 1990s, GE agreed to remove tens of thousands of tons of earth from home sites and truck the toxic dirt to a hazardous-waste dump near Buffalo, New York.
GE under pressure to start clean up work
The US Environmental Protection Agency (EPA) began legal proceedings against GE in 1991, and soon after required the company to start the initial cleanup work on highly contaminated sediment and bank soils. The agency designated GE’s Pittsfield plant and part of the river as a “Superfund” site in 1997 (the Superfund program was responsible for cleaning up the US's most contaminated land). GE executives have strenuously resisted this since it would raise costs and responsibilities associated with the site.
GE ultimately reached a US$250 million settlement with the EPA, the state of Massachusetts and the city of Pittsfield in 1999. A federal court upheld the binding consent decree a year later.
As part of that decree, GE in 2006 finished a US$100 million effort to cleanup the area near its Pittsfield site and a highly contaminated part of the river, and in 2010 it agreed to begin a second phase of PCB removal from the Housatonic. Four years later, however, the company publicly criticized an EPA proposal to force the company to spend more than US$600 million to do just that.
Local group pressure
Local environmental groups criticized the EPA’s “Rest of the River” remedy as insufficient. Jane Winn, executive director of the Berkshire Environmental Action Team in Pittsfield, accused state officials of weakening the agreement during meetings. “It’s going to leave 75 percent of the PCBs still in the river,” she said.
Despite the plan’s limited scope, GE filed a letter with the EPA in October 2015 attempting to block the plan. The company proposed informal negotiations on disputed issues to narrow the focus of the EPA’s proposal. The letter came a few months before Baker’s administration confirmed it had been pursuing talks with the company about a possible move to Massachusetts.
As governor, Baker had significant power over both the awarding of subsidies and the environmental agencies that were supposed to oversee GE’s operations in the state. Though details remained sparse, he said his administration “offered incentives up to US$120 million through grants and other programs” to the company. He also controlled the Executive Office of Energy and the Environment, which was one of the trustees charged with making sure GE restored the Housatonic to health.
Tim Gray, who led the Housatonic River Initiative, an environmental group in Pittsfield, was concerned GE’s move to Boston could give the company greater influence in negotiations with state regulators and environmental officials over the river pollution.
The story almost exactly mirrors a controversy that unfolded in August 2015 in New York. There, Democratic Governor Andrew Cuomo delivered GE big taxpayer subsidies at a time when the company was making the controversial move to shut down its cleanup of the Hudson River — a waterway which was also polluted with PCBs by GE’s manufacturing facilities in the mid 20th century.
Prior to delivering the subsidies, Cuomo — like Baker — had been boosted by GE campaign contributions, and he did not tie his state’s subsidies to GE’s full cleanup of the Hudson River, nor did he act to try to block the cleanup from ending.
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