Taken to the Cleaners
Eleven years ago, after her father suffered a stroke, a middle-aged housewife and mother named Charlotte Walton suddenly found herself at the helm of Maroney's, the family dry-cleaning and laundry business.
Walton put in long hours at Maroney's, which has two locations in Phoenix. As company president, she rarely took vacations, and often awoke at 4 a.m. to open one of the shops. She stayed at the office until late at night, working on books, ordering supplies, figuring out how to maximize benefits for her 100 employees, 80 percent of whom are minorities.
At first, Walton's work ethic served her well. Under her leadership, Maroney's maintained its net worth of about $1 million.
But that began to change five years ago, when Walton learned that all the hard work and honesty in the world are no match against people who have lots of money and lots of friends in the Arizona Legislature.
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In 1992, Maroney's came under attack from a bigger dry-cleaning company, American Linen and Supply Company, known as Alsco, over an environmental dispute.
Alsco's owner, Seattle multimillionaire David Maryatt, had purchased a dry-cleaning and laundry plant at 720 West Buchanan from Maroney's in 1979, seven years before Walton had taken over the business.
In 1992, Maryatt reaped $30 million from the sale of holdings in Oregon, Washington, California and Arizona. But he couldn't sell the West Buchanan plant because it sits in the middle of a state Superfund site--soil and groundwater beneath the Alsco property are dangerously contaminated with perchloroethylene, or PERC, a probable human carcinogen.
Somebody has to pay to clean up the $10.6 million mess, quickly, before it contaminates drinking-water reserves of the City of Tolleson, state officials say.
Because PERC has been used in dry cleaning for decades, no one knows for sure who contaminated the property--Alsco or Maroney's. The Arizona Attorney General's Office contends that the two companies share almost equal blame.
Maroney's denies contributing in any major way to the contamination, but Walton has nevertheless offered to settle with the state--despite the fact that Maroney's has no environmental liability insurance.
Although Maryatt has far more resources--including environmental liability insurance settlements of $1.9 million--he and Alsco have resisted paying more than 10 percent of the projected cleanup expense. The state has requested from $4 million to $5 million from Maryatt to pay for its share of the mess.
Settlement talks with Maroney's have not begun--partially because Alsco hasn't settled and partially because state officials know Maroney's would go broke if it were ordered to pay for a significant portion of the cleanup.
Determined to dodge substantial cleanup expenses, Maryatt began politicking, with great success.
His principal ally has been state Senator Russell Bowers, who has gone to remarkable lengths on Alsco's behalf.
Bowers has repeatedly pressured state officials who have tried to force Alsco to pay for its share of the cleanup.
Bowers has chaired legislative hearings in which Alsco has been portrayed as a small, cooperative company being choked by oppressive state environmental laws.
And this year, the Mesa senator has gone so far as to introduce legislation that would force the state to settle with Alsco for only $250,000. The measure, which was written for Alsco and specifically names the company, also would prevent the state from recovering further costs from Alsco.
And state officials say the Bowers bill would leave Walton with the impossible task of raising $10.5 million to clean up the property. Bowers knows Walton couldn't pay it, which means that Arizona taxpayers would wind up picking up most of the tab.
Charlotte Walton has already spent $200,000--one fifth of her company's onetime value--to pay lawyers and lobbyists to defend her company, first against Alsco, and now against Senator Bowers' bill. And if the Bowers bill doesn't pass, Alsco may file a third-party lawsuit against Maroney's, demanding cleanup costs.
If Walton loses any of these fights, Maroney's is almost certain to go out of business.
Charlotte Walton's life is difficult. She still puts in her long hours at the office, but now she's got an added responsibility: caring for her seriously ill, elderly mother. She often takes her mother to the doctor in the early morning, then works late to make up for the lost time. And she has an additional financial obligation--she pays for home-care givers for her mother.
She has little time to herself, but still yearns for the day that Alsco gets off her back and she settles with the state with Maroney's intact. Then perhaps she'll have the time and money to fulfill a wish to redecorate her Phoenix home, with its 1970s-style shag carpeting and the avocado-green refrigerator.
In Seattle, meanwhile, David Maryatt and his socialite wife Sally don't have such worries. In 1995, the Seattle Times reported about how the couple remodeled their expensive home with 175-year-old Aubusson carpets and elegant antiques, which gave the house a feel of "gilded formality."
Other articles chronicle the Maryatts' social life: Sally chaired a ball committee to benefit a museum; Mary Tyler Moore visited the Maryatts; Sally and her decorator opened an upscale antique shop.
The Maryatts are also politically connected. David is a board member of the Washington Institute, a conservative Washington-state think tank with a regulatory-reformist agenda that claims to have been endorsed by Robert Bork and William F. Buckley Jr. Members of the Washington Institute regularly breakfast with Washington state legislators, promoting conservative policies.
"We want to help Washington's citizens understand and practice the fundamental tenets of a free society: that personal and economic freedom are inseparable; that individuals must be accountable for their actions; and that citizens must respect the lives and property of others," the Institute proclaims on its Internet Web page.
This is exactly the political rhetoric spouted by Russell Bowers--in spite of the fact that his bill puts Charlotte Walton's livelihood and property rights in even more peril.
And it may explain why in 1995 Bowers' campaign chest enjoyed donations of $50 each from Sally and David Maryatt, $100 from David Maryatt's Phoenix attorney James Vieregg and $100 from Ed Ricci, an environmental consultant on Maryatt's payroll. While these sums may seem small, the obvious solidarity is significant.
Bowers' political assent has been swift. The freshman senator was hand-picked by conservative Republican legislative leaders and Governor J. Fife Symington III to chair the Senate Appropriations Committee, a position that gives him power to decide how much money each state agency gets. Bureaucrats are loathe to anger Bowers, fearing financial retribution.
Maryatt also has ties to Symington through Vieregg's Phoenix law firm, Quarles and Brady. The firm, which is registered with the state to lobby for Alsco, also employs P. Robert Fannin, a lawyer who leads the Symington '98 Exploratory Committee, which raises funds for any political campaign the indicted governor might wage in the future. (Quarles and Brady attorneys have also donated to campaigns of Tom Patterson, a state senator and '98 gubernatorial hopeful who has also interceded on Alsco's behalf at the Department of Environmental Quality.)
Vieregg himself supported Bowers in his various campaigns and observers say he is something of an environmental guru to the senator. Vieregg has been observed passing notes and prompting Bowers with nods and head shakes during hearings.
Bowers denies that Vieregg is his guru and denies that he has been bought or co-opted by either Vieregg or Maryatt.
He notes that Maryatt, whom he met at a fund-raising event, donated only $100 to his campaign. And the senator says he does not "consider Mr. Vieregg more of a friend than anyone else in the Legislature."
"He has lobbied me heavily on behalf of small businesses and many times I've had to say 'Jim, stay out of the way,'" Bowers says, adding that Vieregg is more of a "litigator" than a "lobbyist."
Vieregg declined an interview for himself and David Maryatt, citing ongoing settlement negotiations with DEQ. He then referred New Times to the public record. In that public record, Alsco repeatedly claims Maroney's was the chief polluter and demands to settle with the state for about $1 million. Alsco also claims the state's case against it is riddled with indefensible science and inaccurate statements from witnesses.
That public record shows something else: For its support of local politicians, Alsco has been handsomely rewarded.
When he chaired the House Environment Committee in 1996, Bowers rammed through rule changes in the state Superfund (also known as the Water Quality Assurance Revolving Fund, or WQARF) that would make it easier for polluters to get low-dollar settlements with the state. His legislation also imposed a moratorium--July 1996 to July 1997--forbidding state regulators from suing polluters. The moratorium provides time for the Superfund law to be further watered down.
Through all the politicking, Alsco was portrayed as a small company overwhelmed by the state Superfund law. No one seemed to recognize the real irony: that Maroney's--not Alsco--was the business more threatened by state Superfund laws.
This year, newly elected Senator Bowers went to bat for Alsco again--but this time he dropped all pretense of representing the interests of state taxpayers. He introduced Senate Bill 1448, which would force the state to settle with Alsco for only $250,000. (Representative Jeff Groscost sponsored the bill in the House.) When Bowers introduced the bill, he again sang Alsco's praises as a small, cooperative company caught up in a nightmare of bureaucratic red tape.
Critics of SB 1448 contend it is unconstitutional because it specifically names Alsco as its beneficiary, and Bowers now says he has chosen not to push for its passage.
He now claims he wrote the legislation to focus attention on "a gross abuse of process" against Alsco by the Arizona Department of Environmental Quality. He says he's studied "thousands of pages" of documents that show Alsco has been "mistreated" by DEQ because Alsco "had assets to go after."
"I've told Maroney's many times, 'This isn't against you,'" says Bowers.
That's not how Charlotte Walton sees things.
Oddly enough, Alsco asked Walton to sign on to SB 1448, offering to include language that would free Maroney's from cleanup liability and major expense, too.
"It wouldn't be right," she tells New Times. "We don't want special-interest favoritism. But we would like justice."
Charlotte Walton remembers receiving her first "threatening and unfriendly" letter from Alsco attorney Jim Vieregg in 1992. The letter accused Maroney's of contaminating the West Buchanan site when it operated the dry-cleaning and laundry plant in the 1970s.
At the time, Walton was happily running Maroney's, and had no idea there was any controversy over the plant her dad had sold to Alsco.
She soon learned, however, that the Alsco plant sits in the middle of the West Van Buren state Superfund site, a 25-square-mile tract where several companies have dumped dangerous chemicals into the earth. The Alsco site is the most contaminated in the West Van Buren Superfund area. Groundwater beneath the Alsco property is laced with PERC at levels up to 6,600 times the allowable limit set by the Environmental Protection Agency. "Pump and treat" cleanup, which would cost about $10.5 million, would entail pumping the groundwater from the site and removing the PERC by shooting the contaminated water up into enclosed towers, allowing the chemical to escape into the air and be captured by charcoal filters. Using the same pump-and-treat method to remove the "source" of the plume of contamination--heavy PERC concentrations in soil and groundwater beneath the Alsco property--would cost about $2.45 million state officials say.
State officials say cleanup must start soon to protect the public's health. They estimate that, from the Alsco property, a subterranean plume of the polluted groundwater snakes westward for two miles. The Alsco plume mixes with a larger plume of industrial contaminants that flows to the west and threatens the City of Tolleson's drinking-water supply.
Alsco disagrees on the public health threat, and has given DEQ scientific information and anecdotal evidence that it says prove Maroney's contaminated the property. Although the data have since been seriously questioned by the state, Charlotte Walton can't afford to pay for an expensive investigation to refute Alsco's data. She has no environmental liability insurance to pay for such studies.
But DEQ records indicate that her adversary, Alsco, has received $1.9 million (more than twice the current net worth of Maroney's) in insurance settlements to deal with problems related to the West Buchanan Street site and a second contaminated property in Washington state. The records do not say how much of that $1.9 million has been spent on the Phoenix site.
Alsco gave DEQ sworn statements from current and former employees of Alsco. Some employees said they had worked at the West Buchanan Street plant when it was being transferred from Maroney's to Alsco. They recalled that Alsco was careful when handling PERC, and blamed Maroney's for polluting the environment. One plumber even recalled that Maroney's employees poured a substance that he believed to be PERC into a hole dug in the property--an allegation Maroney's adamantly denies.
Alsco scientists also gave the state soil-study tests that seemed to implicate Maroney's as the polluter. But DEQ later determined that some of the data were "unreliable." (The testing lab that Alsco had hired was Westech, which is now fighting to keep its state license in the wake of accusations that it falsified test results that minimized unhealthful pollution levels in Scottsdale's drinking water.)
Charlotte Walton, who had only set foot on the West Buchanan Street site once in her life, responded by giving DEQ another set of sworn statements from former and current Maroney's employees that contradicted those of the Alsco employees. The Maroney's workers said their company handled PERC responsibly and did not substantially pollute the environment.
Unable to figure out who was telling the truth, the state continued sleuthing.
Clues in the public record made state officials wonder whether Alsco was the good environmental citizen it claimed to be. In the course of its investigation of Alsco, the state discovered that in 1992 Alsco had been fined $21,490 for, among other things, being in "significant noncompliance" of city waste-water laws for discharging waste water that exceeded pollution standards.
Also in 1992, Alsco reported to the federal government a substantial PERC spill that had occurred in 1979, shortly after it acquired the facility from Maroney's.
After numerous settlement talks, including several mediation sessions before a federal judge, Alsco and the state signed a settlement agreement in April 1995, public records show. The exact details of the settlement agreement were not made public.
But state documents say Alsco, after signing the agreement, wouldn't close the deal.
Through Russell Bowers, Alsco was working on a far different course of action: It seemed likely that Bowers would convince the Legislature to modify the state Superfund law. The modifications would make it easier for a company to negotiate an absurdly low settlement with the state. Such settlements, in legal jargon, are called "de-minimis" settlements.
The politicking heated up after the settlement talks ended.
Three months after the last settlement talks, on August 30, 1995, the Maryatts, Vieregg and their consultant donated to Bowers' campaign.
That November, just two months later, Dave Maryatt wrote DEQ director Russell Rhoades "at the request of Representative Bowers" to plead Alsco's case.
A few days later, on November 28, 1995, Rhoades wrote to Bowers to explain why he couldn't let Alsco off the hook. He said some of the Alsco data were unreliable, in part because Westech Labs "greatly underestimates" levels of PERC in the soil.
One day later, on November 29, Vieregg thanked Bowers for his assistance, writing: "On behalf of Dave Maryatt, I want to thank you for your interest and decisive action in attempting to achieve a settlement between ADEQ and Alsco. . . . Dave Maryatt would be more than pleased to meet with you, Governor Symington and Director Rhoades to bring this longstanding dispute to a successful resolution and one that achieves a 'win-win' result for the State of Arizona and Alsco."
Bowers was furious when DEQ refused to settle with Alsco. In a nearly incomprehensible January 1996 letter to Rhoades that was copied to Symington, Bowers blasted Maroney's for "abysmal" handling of chemicals, and said it was a "travesty" for the state to go after Maryatt.
Bowers wrote: "Government may not have to worry through hundreds of nights about what is going to happen to one's life's work, but people do! [Emphasis his.] Here those who show responsibility relative to the implementation of 'clean' work practices are still held hostage to rumor, treated with disrespect and used as fodder in the gamble for larger settlements which, I feel, will be no more secure from court challenge than what we fear with Alsco, a never ending cycle of accusation, response and non-resolution, pending other litigation in the future--the very heart of the cancer that Superfund has become nationwide. The never ending limbo into which we put people is abhorrent." By then, under Bowers' leadership, the Superfund law had been changed to make it easier for companies to force the state to accept "de-minimis" settlements.
On July 10, 1996, legislators friendly to Alsco heard that the state might sue Alsco for cleanup expenses before the new law preventing such lawsuits took effect on July 24.
This time, Bowers and state senators Tom Patterson and Stan Barnes interceded, writing to Rhoades, "It would seem an incredible, and a bald-faced act of bad faith that in spite of the Legislature's actions giving new direction and hopefully fair resolutions to Arizona's aquifer pollution problems, you would file a CERCLA [Superfund] lawsuit against Alsco before the . . . deadline so you can slip under the legal wire."
DEQ backed off, and on the day the new law took effect, July 24, 1996, Alsco asked to settle with DEQ under the new, less restrictive, law for $750,000. Alsco claimed it had already spent $250,000 on the problem, bringing its total settlement offer to $1 million--less than one tenth of the anticipated cleanup expense.
(Maroney's also formally requested a small settlement, but did not name a settlement figure. That request was denied.)
Rhoades wouldn't relent to Alsco. In October, he wrote to Maryatt, noting that Alsco had probably used 42 tons of PERC at the site, which means that "Alsco could be responsible for all of the contamination measured at the site by losing less than two fluid ounces of PERC per day, even if Maroney's released nothing."
"The stakes here are high," Rhoades said. "The risk to the environment is high because carcinogenic PERC and other carcinogens are loose in the groundwater moving off towards public wells."
Rhoades also noted that Maroney's would be "unduly prejudiced" if Alsco were to pay only $1 million of the $10.5 million cleanup tab. "The state would be at risk . . . in the event Maroney's estimated net worth of approximately $1 million did not cover 96 percent of the remedy."
Alsco appealed Rhoades' decision on a legal technicality.
At a January 1997 hearing, assistant attorney general Roger Strassburg said Alsco's appeal was a ploy to buy time for SB 1448--Bowers' new bill exempting Alsco--to wind its way through the Legislature. If passed, Strassburg reminded the hearing officer, the bill would force the state to settle with Alsco for $250,000.
Alsco won its appeal, and the hearing officer remanded the whole matter to Rhoades, who has once again opened settlement negotiations with Alsco. Those negotiations are expected to conclude in two weeks.
And Strassburg was right. Vieregg did buy more time. The Bowers bill awaits a committee hearing in the Senate. And even though Bowers insists he will not push for the bill's passage, the legislation is still not dead and could be resurrected if the settlement negotiations between DEQ and Alsco break down again.
Even today, Charlotte Walton is reluctant to criticize Russell Bowers. Rather than carp about SB 1448, which could drive Maroney's out of business if it were passed, she remembers how relieved she was in 1995 when Bowers began trying to amend the state Superfund law. In those days, Walton saw Bowers as a hero.
After all, she believed she was the quintessential small-business owner who faced financial ruin under the old law. It seemed at the time that Bowers was the only politician who "understood" the fix she was in.
She was so gratified that Maroney's donated $100 to Bowers' campaign.
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