Special to the Inter Lake

Indictment alleges firm, seven executives conspired to defraud the federal government

A grand jury has issued a new indictment against W.R. Grace and seven company officials that essentially reinstates charges dismissed by a federal court judge last month.

The new superseding indictment, filed June 26 in U.S. District Court, alleges conspiracy and Clean Air Act violations by Grace and seven top former and current executives in the aftermath of widespread asbestos exposure from the now-defunct vermiculite mine in Libby.

In early June, U.S. District Judge Donald Molloy dismissed a portion of a conspiracy charge against the company and individual defendants under the statute of limitations. Molloy dismissed the portion of the charge that alleged Grace and defendants Alan Stringer, Henry Eschenbach, Jack Wolter, William McCaig, Robert Bettachi, Mario Favorito and Robert Walsh conspired to violate the Clean Air Act and endanger others by knowingly releasing asbestos into the air.

The defendants remained charged with conspiring to defraud the federal government by impeding the efforts of regulatory agencies.

Molloy sided with the defendants' argument that the "knowing endangerment" portion of the original indictment, handed down in early 2005, did not allege the necessary overt acts within the five-year statute of limitations.

Federal prosecutors had alleged that acts of concealment after the asbestos problem came to light in late 1999 furthered the defrauding and endangerment portions of the conspiracy.

The superseding indictment reiterates that the conspiracy was far-reaching, alleging that Grace and its executives knowingly conspired to defraud the government by "impairing, impeding and frustrating" the functions of agencies such as the Environmental Protection Agency.

Grace concealed and misrepresented the hazardous nature of the asbestos that is a byproduct of vermiculite, the court document alleges, adding "it was a purpose of the conspiracy to increase profits and avoid liability" by misleading and preventing the government from guarding against the health risks linked to asbestos exposure.

The new indictment further alleges that Grace and its officials violated the "knowing endangerment" provision of the Clean Air Act.

Grace attorneys have asked that the new charges be dismissed. Their motion notes that Molloy dismissed the previous charge with prejudice, which bars prosecution on the same offense.

According to the defense, the charges in the new indictment are essentially the same as those thrown out by Molloy last month and are therefore invalid.

Assistant U.S. Attorney Kris McLean said the government will file a response to Grace's motion to dismiss the new indictment.

The case is scheduled to go to trial Sept. 11. Molloy recently rejected a defense motion to delay the start of trial from four to six months.