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Dossier 22: The Strange Case of AAR Contractor
March 8, 2004: What the EPA calls one of the largest and most significant cases of environmental fraud ever prosecuted, is coming down the home stretch in federal court in Syracuse, New York. Over the last five years, officials from more than 30 asbestos abatement companies operating from Westchester to Buffalo, have been convicted of charges ranging from violating the Clean Air and Toxic Substance Acts, to ones of bid rigging, money laundering, tax evasion and conspiracy. In thousands of instances, in both private homes and public property, these companies either didn't remove asbestos and faked results, or did what are called "rip and skip" operations: tearing out the asbestos laden material without proper treatment, releasing "snow storms" of fibers into the air. If properties had no asbestos, some companies "salted" them. And were hired to abate what they planted. Some dumped asbestos laden materials in public places. One NYC based company ripped and skipped a public housing project in the upstate city of Plattsburgh, then dumped the results in a cemetery and Salvation Army parking lot. The use of underage, immigrant and temporary workers was common. Most worked without training or protective gear. Hundreds of workers were given phoney certificates of medical surveillance or abatement training. The documents were supplied by facilities in league with the abatement companies. These corrupt companies functioned for over a decade. The buildings they worked on included private homes, public housing, grade schools, colleges, prisons, hospitals, hotels, office complexes, banks, theaters, churches, museums and the New York State Capital Building in Albany.

Along with phoney medical and training certificates, went faked proof of abatement. By law, asbestos abatement must be verified by independent laboratories. Corrupt companies beat the law by using dummy labs. Ones headed by front men but actually owned by individuals who owned abatement companies. The most active dummy was Analytical Laboratories of Albany (ALA) which according to trial testimony by ex-employees, falsified 50,000 to 75,000 samples since inception in 1990. The alleged hidden owner of ALA was Alexander Salvagno of AAR Contractors, Inc. Based in Albany County, AAR was launched in the late 80's by Alex Salvagno and his father Raul Salvagno of AAR Contractors in Florida. Both have been on trial in Syracuse since November: they're the last men standing in the string of prosecutions. The trial is in its final days. Charges include running a criminal enterprise to defraud customers and to violate the federal Clean Air Act and Toxic Substance Control Act, plus price fixing, obstructing justice, mail fraud and money laundering. Alex Salvagno allegedly did his dirty banking in the Grand Cayman Islands.

During the 90's, Alex Salvagno was treasurer of the Environmental Business Association of New York (EBA/NYS). According to a 02/15/04 Syracuse Post-Standard story, he was also once treasurer of the Professional Abatement Contractors of New York (PACNY). Both are influential state industry groups formed in the early 90's. AAR Contractor and its related entity, AAR Environmental Services, were not just in the asbestos business. They specialized in environmental clean-ups of all kinds including lead paint abatement and in demolition related to environmental abatement. Prosecutors at the Salvagno trial list more than 1,500 AAR projects as suspect, including the James A. Fitzpatrick nuclear power plant on Lake Ontario. AAR Environmental Services also held contracts with the Indian Point Nuclear Power Plant, though Indian Point has not appeared on the suspect list. The Indian Point Contracts identify AAR as "minority owned". In newspaper photos the Salvagnos do not appear to be people of color. But perhaps they are Native Americans. The family does go back a ways in upstate New York.

Another Salvagno related entity, Atlantic Surface Prep, Inc. still seems active on the environmental front. In the last posted issue of EBA/NYS online newsletter, Alex Salvagno appears on the board of directors as president of Atlantic Surface Prep, Inc. Despite post indictment declarations of AAR Contractor bankruptcy and what must be hefty legal fees for the Salvagnos, Atlantic Surface Prep as an entity has managed to be generous with a prominent Capital Region non profit group. One headed partly by pols and newspaper publishers. Non profits are a major part of the Capital Region economy: they wield considerable clout when it comes to public contracts. At the Salvagno trial, the former executive director of one major non-profit, Center for the Disabled in Albany, came forward in Salvagno's defense. (The Center incidentally has its own legal issues. Stemming from intimidating workers trying to unionize.) The ex executive director, testified that the money trail which led to Salvagno from dummy lab ALA, was just an accounting mix up between himself, Salvagno and the confessed lab front man. In rebuttal testimony, the front man denied this. And in doing so, confessed again. Earlier, ALA's book keeper had given a detailed account of how Salvagno's financial involvement was allegedly juggled.

According to a 02/15/04 Syracuse Post-Standard story "CNY Raid Helped Start National Crackdown" the EPA investigations into New York State abatement fraud touched off awareness of similar practices nationwide. Referencing the investigations, Brent Kynoch, managing director of the Environmental Information Association, a national asbestos trade group based in Chevy Chase, Maryland, said "What's happening in New York is precisely what has to happen in our industry". In the same story Kevin Cannan, current president of the Professional Abatement Contractors of New York says "...some of the contractors that did bad work two, three, or four years ago have turned around and started to do work again."

Many questions as to how this massive fraud went unchecked in New York State for so long go unanswered. The New York State Labor Department, which oversees conditions of abatement workers, caught AAR violating worker safety laws on several occasions. Yet public contracts kept coming. Indeed, AAR worked on the very building in Albany which houses the Labor Department's Asbestos Control Bureau. 3 years ago, when initial news of the AAR indictments broke, a number of upstate papers carried the story. Since the United States v. Salvagno trial began in November 2003 and during its full 4 months, the Syracuse Post Standard has done in depth coverage. Other regional papers responded when it emerged via testimony that AAR had done local jobs. The New York tabloids have run a story or two. Yet despite the reach of the overall prosecutions, the egregious disregard for general public and worker safety, the cynical and complex frauds and many unanswered questions, news coverage of the Salvagno trial, to quote the single 02/03/04 New York Times story, has been "sporadic" and "few reporters have been present in the courtroom" and "It's not something that's being actively discussed". Coverage has been particularly sparse in the Capital Region. Where you'd think local connections would provide interest.

One fascinating story that did appear however, showed up in the 12/08/02 Albany Times Union, some time after the Salvagno indictments were announced. Titled "Nowadays, the camera's not always so candid" the subject was digital cameras. In what was essentially a Christmas season shopping story a single consumer expounds on how successfully digital cameras can manipulate images. The quoted consumer? None other than Alex Salvagno. Sans mention by himself, or the newspaper, of his pending charges. But though a comprehensive history of the events and main figures connected to United States v. Salvagno has yet to appear in print, perhaps the conviction or acquittal of Alexander and Raul Salvagno will finally lift the cloud hanging over AAR Contractor.

Libby, Montana

Libby, Montana is a small blue collar town. Until the late 80's, residents worked mainly in logging and related industries. As well as in mining. Mining jobs came via the Asarco Silver Mine and from W.R. Grace, who owned and operated a vermiculite mine and vermiculite processing facilities. W.R. Grace closed in 1990 and Ansarco followed a few years later along with a sawmill and a plywood factory. Gradually the residents of Libby lost a way of life where, as town Mayor Tony Berget said in last June's Libby High School commencement address "Families had decent incomes, most families had health insurance, most families could take a vacation." Libby's loss is not unique: many blue collar towns have met similar fates. But what was different for Libby was that decades of W.R. Grace vermiculite mining and processing had left behind a time bomb of asbestos related disease. The vermiculite ore found in Libby was contaminated with asbestos fibers. Mining and processing resulted in the fibers being spread to numerous buildings throughout the town. The federal Agency for Toxic Substances and Disease Registry conducted medical testing for Libby residents in the Summer of 2000. They found mortality in Libby from asbestosis (an incurable asbestos related disease which inflames lung tissue and causes lung scarring) was 40 to 80 times higher than expected and mortality from lung cancer 20 to 30% higher.

The story of the impact of asbestos contamination in Libby and related social, political and legal issues, are the topic of a film called "Libby, Montana" which was made, and just released by, High Plains Films, in Missoula, Montana. Libby received widespread newsmedia coverage in the late 90's. The possibility was raised that CEO Peter Grace's friendship with Ronald Reagan helped W.R. Grace dodge culpability. The film moves closer to Libby's heart and soul than did the news coverage. The filmmakers didn't do a hit and run but hung in there with cameras rolling. High Plains Films was formed in the early 90's by self taught documentary filmmakers Doug Hawes-Davies and Drury Gunn Carr. Since then, High Plains Films productions have won over 30 awards at festivals nationwide. Contact info for High Plains follows. Incidentally, despite the troubles which came to Libby its citizens remain public spirited. Within 6 hours of 9/11 the town's volunteer fire department raised $15,000 for the victims. Ultimately Libby's per capita contribution was among the highest in the nation.

Carola Von Hoffmannstahl-Solomonoff

High Plains Films, Libby, Montana


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Copyright (c) 2004 by Carola Von Hoffmannstahl-Solomonoff. This material may be freely distributed subject to the terms and conditions set forth in the Open Publication License. This license relieves the author of any liability or implication of warranty, grants others permission to use the Content in whole or in part, and insures that the original author will be properly credited when Content is used. It also grants others permission to modify and redistribute the Content if they clearly mark what changes have been made, when they were made, and who made them. Finally, the license insures that if someone else bases a work on this Content, that the resultant work will be made available under the Open Publication License as well.

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