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Superfund destroys a business: the demise of Robert Cox's family business a decade ago is illustrative of the gross injustice wrought by the regulatory leviathan.

Like many other Americans, 56-year. old Robert M. Cox of Oreland, Pennsylvania, once worked in manufacturing. And like too many other Americans of that background, Cox saw his small business--a family enterprise that provided middle-class wages to scores of employees--destroyed by the federal regulatory leviathan.

Ten years ago, Cox was the CEO of the Gilbert Spruance Company, a successful family business headquartered in Philadelphia. Since 1906 the company had been producing industrial coatings for the furniture and kitchen cabinet industries. Clients included Bassett Furniture and Wood-Mode Kitchens. Spruance averaged $3 to $5 million in annual sales and had 45 to 50 employees. In short, Spruance was the quintessential successful all-American small business.

Cox is comfortable being labeled a "progressive" with regard to his political and business philosophy. He was involved in the first Earth Day celebration and is an admirer of the late Robert F. Kennedy. His company was committed to a "proactive position" toward recycling and waste disposal practices.

Cox's faith in the ability of his government to do the right thing was badly shaken when he collided with the federal juggernaut known as Superfund.

Eco-fanatics Strike

"When I started working in my business, I felt that an environmentalist in the paint and wood-finish coatings industry could co-exist with the federal environmental regulations so prevalent over the past 20 years. My experiences, however, proved me incorrect," writes Cox in his book, EPA and Superfund: A Small Business Story, published in 2002.

In 1980, Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), or Superfund. Administered by the Environmental Protection Agency (EPA), the law, according to the agency, "provided broad Federal authority to respond directly to releases or threatened releases of hazardous substances that may endanger public health or the environment." Its mission is to locate, investigate and oversee cleanup of "dirty dirt" and contaminated groundwater from hazardous waste sites. One of Superfund's more implausible goals is restoring these sites to pristine Garden of Eden-like conditions. A Superfund site is typically an abandoned factory, landfill or old mine.

What has become a billion-dollar public works project that causes the average Sierra Club member to swoon also attracts fierce detractors. Jerry Taylor of the Cato Institute describes Superfund as "the regulatory equivalent of the Vietnam War." Peter Samuel, the author of Lead Astray: Inside an EPA Superfund Disaster, accuses the federal government of "looting the funds of major corporations and dissipating the tax dollars of local communities, jeopardizing jobs, disrupting people's lives, and corrupting science while doing little or nothing for health or the environment."

The gross injustice done toward Robert Cox demonstrates that these scorching critiques are on the money.

In 1984, one Marvin Jonas testified before EPA and Department of Justice lawyers in Washington, D.C. Jonas said that he had hauled waste for several giants, such as DuPont and Dow Chemical, as well as for the small Gilbert Spruance Company, to dumps that had become identified as Superfund sites. Cox was told that Jonas, then rumored to be a resident of Costa Rica, was granted immunity for his testimony.

The soft-spoken Cox explains that "under Superfund, joint-and-several liability means that companies can be held accountable and responsible for the cleanup of an entire waste site, even if their contributions were only a fraction of the total. Actions that were legal at the time they took place are now viewed as criminal."

Even if one used a licensed hauler, as Spruance had done, and only a minuscule amount of waste was found at the site, as was the case with Spruance, the company automatically became one of the "potentially responsible parties" (PRPs) due to the punishing retroactive aspects of the law.

Spruance, decreed the feds, was involved with eleven Superfund sites. At one dump--GEMS landfill in Gloucester Township in New Jersey--the company's waste contribution was estimated at .023 percent. Cox and his company were sued for a de minimis (minor) settlement of $150,000 to get the first phase of the cleanup of this dump completed. But the legal wrangling was only beginning. In 1990, the EPA notified Spruance that the company was a potentially responsible party at another New Jersey landfill, and Spruance was asked to pay a settlement of $1.3 million.

No Help from Congress

Large corporations with deep pockets can afford Capitol Hill lobbyists and contingency plans (like shifting factories overseas). Cox had no such recourses. The beleaguered CEO made several trips to Washington, D.C., to plead his case. "They [the Senators] always had sympathy for the small guy, but as soon as I left, it was back to business as usual," remembers Cox.

Even though the ordeal took a toll on his health, Cox's faith in the integrity of his family's business pratices kept him motivated to fight the good fight. "We didn't do anything illegal and did nothing to willfully pollute," he says.

In the end, Spruance did not have the financial resources to cope with the regulatory suits. Nor did it have the capital to remain competitive and continue to supply wood finishes to loyal customers. After spending over $300,000 in legal fees, Cox's "entrepreneurial dream" died. In 1993, he sold his beloved business at a "bargain-basement price." At age 46, the married father of two was forced to find new professional opportunities.

He is now the president of Cox Environmental Consultants, where he wears the hats of adviser, activist, educator and writer. He travels around the country working with government agencies and businesses to promote market-based incentives to improve the environment. He speaks to audiences explaining what Superfund is and why it needs to be reformed.

"If you look at a Superfund dollar, 45 to 65 percent is going toward legal and administrative costs. They don't have enough in the coffers to do the cleanups," says Cox. Indeed. The Philadelphia Inquirer recently reported that the GEMS landfill in New Jersey remains a dump due to a gridlock between the EPA and the New Jersey Department of Environmental Protection over "court negotiations."

Abolish It--Don't Reform It

While Cox is correct that a market-based approach to environmental concerns is needed, it's clear that Superfund, and similar eco-socialist measures, cannot be "reformed."

Notes Jane Shaw, a senior associate at the Property and Environment Research Center (PERC) in Bozeman, Montana: "The Superfund legislation came about because of misunderstanding surrounding the Love Canal waste site in Niagara Falls, New York. People thought that every waste site was a 'ticking time bomb' that would cause disaster. That was wrong, but the law was passed. Then, like many government programs, it faded from public consciousness. So, Americans have lost some of their freedom, and some individuals, such as Bob Cox, have suffered severely. But it's difficult to turn these facts into policy change."

Adds Shaw, "And no matter how great the injustice, a businessman does not pull at the heartstrings of the public the way that more sympathetic figures, such as small children, do."

As for Cox, he remains a survivor: "They [the federal government] threw a lot of dirt on me, but they didn't bury me."

Isabel Lyman is the author of The Homeschooling Revolution (2000).
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Title Annotation:Business
Author:Lyman, Isabel
Publication:The New American
Date:Jan 26, 2004
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