Firm led by Dallas' Simmons defends moves to bypass law
05/18/98
By George Kuempel and Richard Whittle / The Dallas Morning News
Spurned by state legislators, a company controlled by Dallas billionaire Harold Simmons has been angling aggressively for federal authority to become Texas' first private nuclear garbage collector.
At stake are federal contracts - worth what experts have called "Bill Gates-type" profits - to dispose of mountains of trash left over from the nuclear arms race.
But the U.S. Department of Energy recently joined the state in blocking efforts by Mr. Simmons' company, Waste Control Specialists, to get its hands on a radioactive pot of gold.
In response, the company - known as WCS - has waged a brash fight in the courts and through key Republicans in Congress to overcome state opposition, public records and interviews show.
WCS officials have defended their actions and say they simply want to break a Utah company's monopoly on federal contracts to dispose of certain nuclear waste.
WCS has promised to turn its $50 million hazardous-waste dump now operating in arid Andrews County, just across the border from New Mexico in West Texas, into "the center of the waste management universe."
Last week, a federal appeals court dealt WCS a setback, overturning a lower court order that would have forced the Energy Department to let the company bid on its nuclear waste disposal contracts.
A WSC attorney said it probably will petition the 5th U.S. Circuit Court of Appeals for a rehearing of its suit against the department.
That is just one aspect of the company's campaign, which Washington veterans say has been unusual in its pugnacity - marked by high-powered lobbyists, campaign contributions, legal threats and political retribution.
State officials in Texas and elsewhere fear a WCS victory could radically change federal policy on nuclear waste disposal - and erode the right of states to decide what gets buried in their soil.
Texas Attorney General Dan Morales sided with the Energy Department in its rejection of a WCS plan that he said would circumvent state law, which bans private companies from disposing of low-level nuclear waste.
WCS wants the Energy Department to sidestep that by agreeing to regulate the Andrews County site itself.
Mr. Morales said the department had "identified this case for what it really is - an effort to dictate waste management policy to the agency [and the nation] that, not coincidentally, would offer WCS a way to evade Texas law and serve the firm's economic interest."
Fourteen other states also have objected to WCS's proposal. And the National Governors Association has expressed "utmost concern," saying states "have a fundamental right to protect their citizens and the environment within their borders."
Former U.S. Rep. Kent Hance of Austin, a WCS co-owner, said such concerns are unfounded and that the company's "state-of-the-art" dump has overwhelming local support.
"We want a chance to compete. We want the opportunity to take the DOE waste, and we want them to process our application [to bid on federal contracts]," he said.
Court documents, other records and interviews show that besides suing the Energy Department, WCS's strategy has included:
Hiring politically connected Washington lobbyists - and agreeing to pay one up to $18 million if the company is successful.
Donating more than $90,000 to key senators and House members over the past two years.
Getting its congressional allies to block the promotion of an Energy Department official who WCS executives considered a foe of its plans.
Suing a Utah rival that owns the nation's only state-licensed private low-level nuclear waste site.
Wright Andrews, past president of the American League of Lobbyists, said WCS's lobbying has been hard-edged, even for Washington.
"Based on what I have heard, it sounds as though this is an exceptionally aggressive and very political lobbying effort," said Mr. Andrews, who has lobbied Congress on nuclear waste issues. "But it sounds like it's high-stakes."
In March, the Energy Department agreed to review its policy of using only state-licensed nuclear waste dumps. Still, Marc Johnston, the department's deputy general counsel for litigation, said agency experts remain skeptical of WCS's plan.
"While we believe that legally this is a viable option, we are not convinced that, as a matter of policy, it makes sense for DOE to get into the business of regulating a commercial disposal facility," Mr. Johnston said.
Growing problem
The nation has been debating what to do with radioactive waste since the dawn of the nuclear age more than 50 years ago. In 1980, Congress ordered the states to either dispose of their own radioactive refuse from hospitals, research facilities and utilities or band together and share a common dump.
Texas has proposed such a compact with Maine and Vermont, with the waste in question to be buried near Sierra Blanca, another West Texas location. That has riled local residents and split the state's congressional delegation.
Since the end of the Cold War, meanwhile, the federal government has been closing elements of its own nuclear complex - the network of facilities around the country that made nuclear bombs and warheads.
The Energy Department now must dispose of literal mountains of "low-level" and "mixed" nuclear waste - mostly soil but also contaminated clothing, tools, equipment, dismantled buildings and machinery - generated by the cleanup.
The department expects to spend between $200 million and $800 million to bury about 2 million cubic meters of the slightly contaminated refuse - enough to cover 40 football fields with a 30-foot-deep blanket of debris.
Under existing policy, any private firm seeking to bid on that business must either have a state license or, in some states other than Texas, approval from the federal Nuclear Regulatory Commission.
The only company that has such a state license is Envirocare Inc. of Utah, which consequently has enjoyed a monopoly on such business for several years.
Mr. Simmons, a private investor, bought a controlling stake in WCS for $25 million in 1995 from its founder, Kenneth N. Bigham, and his partner, Mr. Hance. Mr. Simmons, who has been a major contributor to state and federal politicians, has said the Andrews County site could be "a very productive and big business over a period of time."
Andrews County business and government leaders, who hunger for jobs and tax revenue, have supported the company. But its decision four years ago to go into the radioactive waste disposal business met with stiff resistance elsewhere.
In 1995, WCS tried unsuccessfully to get the Texas Legislature to change the state law prohibiting private companies from disposing of low-level nuclear waste.
WCS' efforts prompted allegations by two House members, Rep. Ray Allen, R-Grand Prairie, and Rep. Robert Talton, R-Pasadena, that Mr. Hance and a company lobbyist had offered Mr. Talton, who opposed the measure, campaign donations and a possible job.
Mr. Hance denied the accusations, but the bill was knocked down on a technicality late in the legislative session.
Bypassing state law
Unable to get a state license, WCS prepared a new plan: the Energy Department or a university would oversee any nuclear waste disposal at its Andrews County site, using federal authority to bypass state law.
As the department pondered that in 1996, the company's chief competitor got ensnared in a legal dispute that WCS tried to use to bolster its case.
The former chief nuclear regulator for Utah sued Envirocare's owner, complaining the businessman had stopped paying him hundreds of thousands of dollars in "consulting fees" - for work done on the side while he was still a state official. Envirocare's owner countersued, accusing the regulator of extortion.
A federal grand jury is investigating.
"It's a political mess," said Tom Cochran, chief scientist of the Natural Resources Defense Council, a Washington environmental group that tried unsuccessfully to get Envirocare's dump closed on the grounds the company had "bought" its Utah license.
The Energy Department has continued to use Envirocare, although it demanded that the company's owner temporarily step aside.
Mr. Hance assailed the department's response to Envirocare's troubles. "In all my years in government, I have never seen a state or federal agency run toward a scandal instead of running away from it," Mr. Hance said.
A WCS suit against Envirocare and its top Texas lobbyist, former House Speaker Billy Clayton, is pending in state District Court in Andrews County.
WCS said its rival disrupted its attempts for government approval by spreading false information. Envirocare and Mr. Clayton say they did nothing wrong.
Lobbying efforts
After the Texas Legislature refused to exempt it from the law against private nuclear waste dumps, WCS shifted its focus to Washington.
Since October 1995, the company has had a former top Senate Energy Committee aide, Daryl Owen, lobbying Congress on a contingency contract that could pay him $18.4 million if the company were approved as a nuclear waste dump, according to Securities and Exchange Commission records and Mr. Hance.
Last fall, WCS added to its team the lobbying firm of political consultant Charles Black, a veteran GOP operative. Also trying to help are two of Gov. George W. Bush's former top advisers, Dallas consultant Jim Francis and Austin lobbyist Cliff Johnson.
Mr. Francis is an adviser to Mr. Simmons. Mr. Johnson represents a group of Andrews County business, civic and political leaders who support WCS.
Between May and December of last year, Mr. Hance, Mr. Simmons, WCS founder Mr. Bigham, family members and others associated with the company gave nearly $90,000 in contributions to key members of Congress.
That included $16,500 given last August to Sen. Richard Shelby, R-Ala., in Dallas, Mr. Hance said. Mr. Shelby, with whom Mr. Hance once served in the U.S. House, was in Dallas to hold a separate fund-raising dinner.
In court documents, Mr. Hance said he asked Mr. Shelby and Texas' two Republican senators, Phil Gramm and Kay Bailey Hutchison, to block a vote on the nomination of Mary Anne Sullivan as Energy Department general counsel.
WCS officials said Ms. Sullivan, as a senior department lawyer, had undermined their plan.
The Senate Energy Committee approved her nomination last fall but it was blocked from consideration by the full Senate. The newsletter Inside Energy has reported that the senators responsible included Mr. Shelby, Mr. Gramm and Ms. Hutchison.
Aides for Mr. Gramm and Ms. Hutchison denied the senators had blocked the nomination. Mr. Shelby's spokeswoman did not return a phone call seeking comment.
Ms. Sullivan declined through a department spokesman to comment.
A former department employee, speaking on condition of anonymity, said the company had misjudged Ms. Sullivan, who he said was sympathetic to the WCS proposal.
"She told me, 'We were working in the direction of WCS, but then when they filed all these court cases and stirred all this up on the Hill, it got everybody's back up,' " he said.
WCS's congressional supporters also sent Energy Secretary Federico Pena letters either urging him to reconsider WCS's proposal or questioning why his department was still doing business with Envirocare.
Mr. Gramm, Ms. Hutchison and Mr. Shelby were among the letter-writers. Mr. Pena also received a letter signed by 18 of the 30 Texas House members, nine of whom had received donations from WCS backers. The letter urged Mr. Pena to give WCS's proposal "high priority."
The company sued the department in August when negotiations with the agency fell through. U.S. District Judge Joe Kendall of Dallas later ruled that the Department had no right to keep WCS from bidding for disposal contracts. But the appeal courts overturned that.
Meanwhile, the conflict in Washington continues.
WSC officials say Envirocare is working to get senators to amend a defense bill so that it would, in effect, kill WCS's chances of competing with Envirocare.
A draft of the amendment would bar the Energy Department from giving nuclear waste disposal contracts to "any site not owned by the United States" - unless it has a state or federal license. Debate on the defense bill could begin as early as this week.