Bankruptcy woes and a slew of legal setbacks may have leading fiberglass manufacturer Owens Corning down, but the multi-billion dollar company has no shortage of plans to weasel out of obligations and get others—including U.S. taxpayers— to pay for its corporate irresponsibility.

Corporate killer bailout bill re-introduced, advances.

HR 1412, laughingly titled the “Asbestos Tax Fairness Act” has picked up 95 co-sponsors from both parties in the U.S. House of Representatives.   This bill, which will cost taxpayers at least $2.2 billion, was defeated in the waning days of the last congressional session.   Lobbyists for asbestos manufacturers have introduced similar measures every year since 1977, according to the New York Committee on Occupational Health and Safety (NYCOSH).

HR 1412 reimburses asbestos manufacturing companies for the cost of killing their employees.   It does this by offering a one-for-one tax refund for every dollar these killer coprorations ever lost in the asbestos business, including money put into asbestos settlement trusts, which pay damages to injured workers and (mostly) the families of deceased workers.

Existing law provides tax refunds for product-liability losses, but only on taxes paid during the 10 years prior to the loss; this bill extends that period to more than 80 years.   It also allows asbestos companies to collect refunds for losses resulting from punitive damages, which are awarded when a jury finds a behavior so offensive, so disgusting, that it feels it must supplement the damage award with additional penalty.

This measure is strongly opposed by FIN, by consumer groups, and by public health experts and advocates.   It sends the wrong message to polluters and companies which do not value the health of their workers.   It also puts the U.S. taxpayer on the hook for the sins private businesses committed in the name of profit.

According to an October 3, 2000 letter from Mohammad N. Akhter M.D., Executive Director of   the American Public Health Association, to members of Congress:

“There is no question that the tax refunds that would occur under this bill will go to corporations that are culpable of long-term pernicious activity. It is widely reported that Owens Corning will be one of the major beneficiaries of this bill, the same company which was characterized this way by the Supreme Court of Florida in Ballard v. Owens-Corning Fiberglas Corp. (1999):

‘The clear and convincing evidence in this case revealed that for more than thirty years the company concealed what it knew about the dangers of asbestos. In fact, the company's conduct was even worse than concealment, it also included intentional and knowing misrepresentations concerning the danger of its asbestos containing products.’

This bill uses public funds to lighten the burden of liability for occupational disease caused by corporations that consciously, willfully and wantonly exposed workers and consumers to a deadly carcinogen. In so doing, it encourages and vindicates heinous corporate crimes.”

Remember, this is the same company now telling all of us that fiberglass is safe to use!   Always consider the source!

Dog-eat-dog world

Industry observers like to point to the cigarette manufacturers as an example of what the future holds for the manufacturers of man-made asbestos.    Well, there may be honor among thieves, but there’s none among corporate killers.  

Owens Corning has gone to court in Mississippi, and soon California, to try and shift some of the blame for asbestos-based disease—and resulting large jury awards—to cigarette makers.   While there seems to no question that asbestos and cigarettes (and fiberglass and cigarettes) are a particularly lethal combination, the Mississippi courts are having none of this.

A “special master” appointed by the court to advise the judge on this complicated case recommended on May 21, 2000 that Owens Corning’s lawsuit against tobacco manufacturers be thrown out of court.  

According to Robert Sneed, the special master, "Under Mississippi law, and the prevailing law in virtually all jurisdictions, Owens Corning is prohibited ... from recovering from the tobacco defendants."  

Owens Corning says it will appeal if Jefferson County Circuit Court judge Lamar Pickard takes the master’s advice and dismisses the case.

Insurers cry foul  

Owens Corning isn’t the only company feeling the pain of business decisions which put profits before people.   The people who sold insurance to asbestos manufacturers are hurting, too.

According to the Wall Street Journal, the nation’s property-casualty insurance industry has already paid out more than $21 billion in asbestos litigation claims, and may pay another $43 billion before all is said and done.   The insurers have only $10 billion set aside for future claims, leaving a $30 billion deficit to fill.

Insurance industry watchers say the bankruptcies of major asbestos producers, such as Owens Corning and W.R. Grace, mean that insurers will wind up paying as much as 90 percent of remaining claims.

Bond fraud allegations prompt suit

Bankruptcies mean bond defaults, and Owens Corning has plenty of bonds which are now almost worthless.   The people holding these bonds have lost a fortune, and they will not go quietly into the night.  

During 1998 and 1999, the John Hancock Life Insurance Company apparently bought a bundle of O-C bonds, and is looking at huge losses since Owens Corning tanked.   Hancock executives apparently feel that O-C’s directors and executives knew, or should have known, that the company was in serious financial hot water at the time the bonds were sold, and deliberately did not disclose that information.

Hancock cannot sue the company itself, because Owens Corning is protected by bankruptcy, so they have chosen to sue members of the Owens Corning Board of Directors, Owens Corning top management, and the bond underwriters.

FIN wishes John Hancock good luck and a handsome settlement.