Labor Raises New Concerns About Asbestos Fund

By Susan Cornwell
Reuters

Wed July 9, 2003 0633 PM ET

http://reuters.com/newsArticle.jhtml?type=politicsNews&storyID=3064168

[For an archive of articles and documents concerning asbestos-related occupational and environmental health, visit http//www.nycosh.org/linktopics/asbestos.html]

WASHINGTON (Reuters) - Organized labor has written to U.S. senators raising new concerns about attempts to set up an asbestos compensation fund and is asking them to oppose the legislation when a committee resumes work on it on Thursday.

The letter from AFL-CIO president John Sweeney, a copy of which was obtained by Reuters Wednesday, marked a fresh setback in efforts to reach bipartisan agreement on Sen. Orrin Hatch's bill to take asbestos claims out of courts and pay them from a fund of between $108 billion and $153 billion.

Other potential obstacles to a deal appeared. The trustees of an existing asbestos trust complained about the bill. And one Democrat pledged to offer amendments to exempt pending asbestos claims and existing settlements, such as Halliburton's agreement to pay $4.25 billion to settle asbestos claims.

Among concerns listed in the AFL-CIO letter was a worry that there would not be enough money available at the start of the fund to pay an early rush of claims from asbestos victims who are already in court or who might decide to file.

"If there is a drain on the fund's finances, it will most likely occur in the first few years, when a disproportionately large number of claims are anticipated to be filed," Sweeney said in the letter to members of the Judiciary Committee.

"The front-end contributions need to be significantly increased," the union federation chief said, referring to the contributions pledged by business and insurers for the fund.

The letter was sent to Capitol Hill on Tuesday. AFL-CIO officials said on Wednesday they were unaware of any progress on the asbestos bill that would change their opposition to it.

CASH SHORTAGE?

Peg Seminario, the AFL-CIO's occupational health official, said that while the Hatch bill seeks $5 billion in contributions to the fund in the first year, it is estimated that about 300,000 asbestos claims now in court would cost $20 billion.

"So the money is not there," she said.

Asbestos was widely used for fireproofing and insulation until the 1970s, when scientists concluded that inhaled fibers could be linked to cancer and other diseases.

Hatch, the Utah Republican who chairs the Judiciary Committee, wants the panel to vote the asbestos bill to the full Senate on Thursday. He hopes for Democratic support, but labor's continued opposition could make that difficult.

Stock in a number of manufacturers facing asbestos liabilities fell in Wednesday trading. Shares in Georgia-Pacific Corp. fell 3.1 percent, shares in W.R. Grace & Co. were down 6.7 percent, and the stock of USG Corp. dropped 13.4 percent.

However, shares in Halliburton Co. rose 2.7 percent, while the stock of Honeywell International Inc. was up nearly 1 percent. Analysts say the Hatch bill would cut the asbestos liabilities of both companies.

Sen. Richard Durbin, an Illinois Democrat, plans to propose several amendments on Thursday, including one preserving existing settlements and another exempting pending claims.

Claimants who are on the verge of court settlements told reporters on Wednesday they feared they would not live to see payment if they must wait for the fund to be set up.

"This bill could literally be my death sentence," said 39-year-old Angela Ruhl of Garden Grove, California, a victim of mesothelioma, a particularly lethal asbestos-caused cancer.

The trustees of Keene Creditors Trust, one of the trusts set up to pay claims for bankrupt companies, wrote to senators warning that litigation against the bill "will likely take years to resolve" and asking they not be part of the new fund. The Hatch bill counts on $4 billion from existing trusts.

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Jonathan Bennett
Public Affairs Director, New York Committee for Occupational Safety and Health
275 7th Ave., New York, N.Y. 10001
jbennett@nycosh.org

*** POSTED JULY 10 2003 ***