Ohio seeks details on Envirosafe ownership

Toledo's water intake lines run through the middle of the Envirosafe landfill in Oregon.

COLUMBUS - For more than two years, state officials have been trying to determine who owns the Envirosafe landfill in Oregon.

Ohio law requires not only that ownership of hazardous waste landfills be disclosed, but that the backgrounds and fingerprints of officers, directors, and key employees be provided to state officials.

That hasn't been done, said Gary Taylor, supervisor of the Ohio attorney general's environmental background investigation unit.

In 2001, Envirosource, Inc., the Pennsylvania parent company of Envirosafe Services of Ohio, Inc., which operates the landfill, merged with ES Acquisition Corp.

State officials determined that ES Acquisition is a wholly owned subsidiary of GSC Recovery II, L.P., which in turn is a subsidiary of GSC Partners, of Florham Park, N.J.

Mr. Taylor said GSC Partners failed to provide background information to the state by a Jan. 12, 2001, deadline, and still has not provided full information.

“During the course of the investigation, the attorney general's office received confusing and contradicting information regarding the merger, organizational structure, and transfers of ownership concerning the parent entity or entities” of Envirosafe Services of Ohio, Inc., Mr. Taylor wrote in a report to the Ohio Environmental Protection Agency, which regulates the landfill.

The background investigation is to ensure that owners and operators have the “competency and reliability and expertise” to operate a hazardous waste facility, said Harry Sarvis, a manager with the Ohio EPA's division of hazardous waste management.

The state requires fingerprints because those who have committed at least one of 21 crimes - including securities fraud and forgery - can be prohibited from being landfill owners, Mr. Sarvis said.

“The policy of the state is to make sure that the waste disposal industry is scrupulously clean,” said Mark Gribben, a spokesman for state Attorney General Jim Petro.

A Toledo attorney representing Envirosafe Services of Ohio, Inc., said the state has all the information it needs about the landfill's owners.

“We do know we disclosed everyone with involvement of the facility,” said Richard Sargeant, an attorney with Eastman & Smith.

Mr. Sargeant said GSC Partners are so removed from the operations and management of the Oregon landfill, there is no reason to supply information about them to the state.

“Envirosafe Services of Ohio is the group of people who run the facility. GSC Partners doesn't interest themselves in us,” he said.

Officers of GSC Partners didn't return messages seeking comment.

A former Ohio Environmental Protection Agency administrator said the state needs to know more than what has been disclosed about Envirosafe's new owners.

“This company should be totally transparent about who they are,” said Gerry Ioannides, who served on the state Hazardous Waste Facility Board in 1991 when it approved an expansion of the Envirosafe landfill. “We issued the permit based on the trust of the people who came before us. You can't issue a permit if we really don't know who the owners are.”

Judy Junga, a Toledo resident and an Envirosafe watchdog who for years has pushed state officials to better monitor the Oregon landfill, said the state should insist that GSC Partners discloses details about its ownership and provide all fingerprints of directors, officers, and key employees.

“The people who run the Envirosafe facility were given a permit under Ohio law. If they don't want to comply with all of Ohio law, let them send their trucks and train cars and dig out all the stuff they have dumped in our backyard - next to Toledo's water lines - and take it all back and dump it in the backyards of the people who own this facility,” she said.

Toledo's water intake lines, which transport water from Lake Erie to the city's water-treatment plant in East Toledo, run between hazardous waste pits. They are monitored by city officials to assure no landfill contamination enters the lines.

Envirosource officials have told the state, “Entities managed by” GSC Partners own 70.6 percent of the outstanding stock and notes of Envirosource.

“We have no other current information as to who owns Envirosource stock and notes,” wrote John Minihan, assistant general counsel of Envirosource.

Eastman & Smith gave the state an organizational chart that shows Fairlane Management Corp. as the parent company of Envirosafe Services of Ohio. Fairlane was incorporated Oct. 3, 2002, in Delaware.

GSC Partners' portfolio includes 70.6 percent of the shares of Fairlane Management Corp, but Eastman & Smith has told the state it can't identify the owners of the remaining 29.4 percent of the shares of Fairlane.

The reason? The stock and notes are “held in street name,” which refers to trust companies that hold stock on behalf of owners, said Mr. Sargeant, the Eastman & Smith attorney.

Because Fairlane is a private company, the U.S. Securities and Exchange Commission cannot require the owners to reveal their identities, he said.

Even so, the attorney general's office has repeated its request for more details on ownership.

Eastman & Smith has asked the state to waive the request for information about GSC Partners, saying it isn't involved in managing Envirosafe Services of Ohio.

The attorney general's office has forwarded the investigative report to the Ohio EPA for review. EPA Director Chris Jones has authority to revoke permits based on the findings of a background investigation, Mr. Sarvis said.