Although the U.S. attorney for Minnesota and officials at the U.S. Environmental Protection Agency refused to comment on the investigation of Darling International Inc., the company's federally required disclosure forms confirm the investigation.
According to its most recent filing with the Securities and Exchange Commission, Darling estimates the range of "possible losses"--apparently including potential fines, lawsuits, cleanup costs, and legal fees--at somewhere between $12 million and $21 million.
The company's quarterly SEC filing also states that "based on the negotiations to date, the company believes that these claims will be settled for approximately $4 million." The company, which reported about $128 million in sales during the first nine months of 1996, apparently hopes to settle the case before the end of the year.
In its SEC forms, the firm describes itself as a company that "collects and processes renderable animal by-product (fat, bones, and offal), restaurant grease, and bakery waste to produce finished products of tallow, meat and bone meal, yellow grease, and dried bakery product."
David Lillehaug, U.S. attorney for Minnesota, refused to discuss any possibility of an out-of-court settlement with Darling. Dennis B. Longmire, Darling's chief executive officer and chairman of the board, could not be reached for comment about the case.
Suspicions of environmental violations at Darling's Blue Earth Rendering first surfaced in September 1992, when numerous plant employees complained about its operations to the Minnesota Division of Natural Resources. Erik Lysne, a state conservation officer with the division, says employees reported several problems, including a drainage pipe leading from the maintenance shop into an embankment on a creek that flows into the Blue Earth River.
"Employees complained that trucks had been washed over the drain with hazardous cleaners," Lysne says. He adds that plant workers also claimed that the drainage pipe bypassed the plant's wastewater treatment system, funneling wastes like animal carcasses, blood, and solvents directly into the stream.
In a February 15, 1993 report in the Faribault County (Minnesota) Register detailing the employees' allegations, plant general manager Tim Guzek said "I'm not aware of any major violations."
The Minnesota Pollution Control Agency and Minnesota Attorney General's Office began investigating the plant, and in April 1993 the MPCA issued a notice of violations to the company. The notice included 11 alleged environmental violations, including discharge of illegal amounts of ammonia, suspended solids, and oil and grease; untreated wastewater overflowing a manhole and flowing into the Blue Earth; and the dumping of raw sewage into the Blue Earth.
Darling International responded with documentation that denied or "disagreed with" most of the allegations. In several instances, however, the company reported that it would nevertheless comply with the state's requirements.
Guzek, the rendering plant's general manager, has since been fired by the company, along with two of his subordinate managers, says a defense attorney involved in the case.
Officials say the alleged violations did not have a direct impact on drinking water supplies.
Whatever the outcome of the investigation, it is clear that the residents of tiny Blue Earth--population 4,000--have long had a tenuous relationship with Darling International. The town sits in prime farm land about nine miles north of the Iowa-Minnesota border. Two summers ago it was unseasonably hot, says Kyle MacArthur, editor of the Faribault County Register. The breeze often blew south to north--straight from the rendering plant just outside town and into Blue Earth.
"People would be inside their houses all day with the air conditioning on, then come outside and that dead-cow smell from the rendering plant would just about knock them over," MacArthur says. After numerous complaints and the city's threats to sue the plant, MacArthur says, Darling ultimately installed "masking agents" at the plant that neutralize most of the offensive odors. "They seemed to be genuinely concerned," he says.
But Lysne, the conservation officer who still monitors the Blue Earth River and the surrounding 1,000-mile area for poachers, polluters, and other serious scofflaws, isn't nearly so generous.
"I'm very familiar with the Blue Earth," he says of the river that is about one-quarter-mile wide and 15 feet at its deepest. "If it were farther up north this river would be teeming with life--turtles, clams, minnows.
"In a rural area like this, it's hard to point the finger back to Darling and blame them entirely for the problem. Farmers around here have their own history of dumping cow and hog manure into the river," Lysne says. "But Darling International is a big, big player. And all I know is you can walk 30 miles along the Blue Earth's banks and find no living vegetation--except for a few carp and rough fish. These are chemically corrupted waters.