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Kerr-McGee’s environmental sites. via US Dept of Justice.

Kerr-McGee, the energy company that for forty years has famously lingered in the shadow of suspicion for the killing of worker Karen Silkwood, engaged in a massive fraud to avoid culpability for contaminating hundreds of sites across the nation with radioactive and fuel wastes, creosote and other chemicals, according to the U.S. Department of Justice.

Rather than fight the charges, Kerr-McGee and parent company Anadarko Petroleum Corporation entered into $5.15 billion settlement, which Acting Assistant Attorney General Dreher called, “a just resolution of an historic injustice to the American people and our environment.”

Nick Brown, reporting in Reuters, does an excellent job of dissecting the complex case. Here are excerpts. A link to his full story follows as well:

The agreement resolves a long-running lawsuit against the Kerr-McGee energy and chemical company, which Anadarko bought in 2006. The case was brought by a trust representing the U.S. government, 11 state governments, Indian tribes and individuals.

The trust was seeking cleanup costs at more than 2,000 sites nationwide. It was also seeking payment for claims from more than 8,000 people who said their exposure to Kerr-McGee’s wood treatment plants in Avoca, Pennsylvania and Manville, New Jersey caused cancer, which in some cases led to death.

. . . Anadarko had argued the environmental liabilities belonged to Tronox Ltd, a paint and chemicals company that was spun off from Kerr-McGee. The sale of Tronox, which ultimately fell into bankruptcy, happened before Anadarko’s purchase.

In December, U.S. Bankruptcy Judge Allan Gropper of New York said Kerr-McGee knew the spin-off would harm Tronox’s business by weighing it with heavy environmental liabilities. He said Anadarko should pay from $5.15 billion to more than $14 billion in cleanup costs. Anadarko said after the ruling the liabilities should be as little as $850 million.

Link to Nick Brown’s full story in Reuters.

Link to announcement by the U.S. Department of Justice.