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 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
Carola Von Hoffmannstahl-Solomonoff
High Plains Films, Libby, Montana
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