I was surprised to read in last week’s New York Times article “Telling Strength from Weakness” where Kevin M. Warsh, a former Federal Reserve Governor stated, “Regulators must require clearer and more expansive disclosures so that the financial statements and associated risks of large and complex companies can be assessed. If investors had more detailed information from these institutions, they would very likely sell their shares and debt if they took too many risks. This would hold managers of these institutions accountable for reckless behavior by making them pay more to fund their businesses.“

Mr. Warsh was of course referring to large banks, but actually the lack of disclosure applies to many if not most corporations when they report to their shareholders, the owners of the company! We have lost faith in the federal regulators to enforce transparency regulations. Given corporate law departments, Super Pacs and their army of lobbyists in Washington, corporations will always find a way not to disclose.

In an effort to provide some clarity for investors, EFIS has developed a unique quick search on-line corporate reference library, in database form. The corporate reference guides include corporate name changes (from 1872 to present), corporate acquisitions, corporate acronyms , corporate equity and corporate ownership relations all on one computer screen. This research tool is offered at no charge to public libraries, universities and governmental entities for the first year with no on-going commitment on their part.

EFIS has just completed the dizzying task of perusing multi year annual reports for virtually every listed Standard and Poor’s 500 company in order to extract names of companies acquired. This author is not sure if the lack of information in the annual reports of many corporations is for the sake of readability or is in fact intentional. Most companies report, “During the last three years, we acquired X number of companies for X amount with the largest acquisition being ABC company.” Of course there are exceptions , in one year Fiserv Inc. listed four pages of acquisitions since 1984 – now that’s transparency! In order to further beef up information on corporate acquisitions, we are searching for other reliable third party sources to fill in the annual report blanks. Stay tuned – there’s more to come. To learn more about EFIS, please visit our website efisinfo.com.

I was surprised to learn that the ASARCO plume in Ruston is affecting several locales in Lakewood which is 10 to 15 miles away from the site of the former smelter located just outside Tacoma Washington. After some thought, it makes perfect sense that a smelter that existed for over 100 years with a 500’ stack would spew toxins, such as lead and arsenic, for a considerable distance. Parts of Lakewood between Bridgeport Way and Lakewood Drive have shown high levels of contamination. The Washington State Department of Ecology is offering free soil testing to citizens of Lakewood as part of the settlement with ASARCO in 2009. Washington state delineates necessary clean-up standards of more than 20 parts per million for arsenic and 250 parts per million for lead. People living in the affected areas should take precautions to minimize consumption of toxins such as wearing gloves when working with the soil, using raised beds for growing vegetables and dampening soil before planting.

According to EFIS Corporate Reference Library database, ASARCO (formally American Smelting and Refining Co) has either gone bankrupt or has gone private. Since the company is not a publicly traded company, it is impossible to determine the potential impact on earnings and the threshold of “materiality”. If the company has indeed gone private, the legal maneuvering makes perfect sense, considering all the Superfund Sites around the country in which ASARCO is a responsible party. The company most likely does not want outside prying eyes on their financials!

President Obama’s 2013 proposed budget was released this week. The proposed budget will reduce the Superfund program of the EPA by $37 million, which in turn most likely means a reduction of the number of sites investigated and cleaned-up by EPA next fiscal year. This author was surprised by the president’s action, but with the large deficit at hand, it is understandable. The reported amount does not alter the number of Superfund Sites on the NPL nor does it alter the process of clean-up (i.e. proposed, final, remove or delisted), only the speed of clean-up. Furthermore, the budgeted amount does not include emergencies such as sudden releases of hazardous waste where immediate clean-up actions occur to reduce the imminent potential health impact on humans and/or the environment (Unilateral Orders).

The 2011 updates on public corporate acquisitions, names changes, stockholder equity and corporate acronyms are complete. Our unique quick search reference guides are a comprehensive assemblage of corporate name changes (from 1872 to present), corporate acquisitions, corporate acronyms, corporate stockholder equity and corporate ownership relations all delineated on one page making comprehensive research on any publicly held company easy and quick. For example, the current movement known as “Occupy Wall Street” could make quick work of researching any company who took stimulus money during the 2008 financial meltdown. This is a great website for all preliminary research endeavors. To view examples of the information, please visit our website www.efisinfo.com and if you like what you see, ask your university or public library to subscribe to this free, continuously updated database.

Massachusetts Department of Environmental Protection (MassDEP) reached a settlement with W.R. Grace to pay for the cleanup at nine (9) contaminated properties around the state. The state will receive $700,298 plus accrued interest from June 2005; and $105,582.97 for past costs and accrued interest from May 25, 2010. The state reserves the right to sue for additional natural resource claims at the: Acton, Wells G&H and Blackburn & Union Privileges sites. In December 2010, W.R. Grace reported a negative stockholder equity of $75.7 million (-75.7). This means that any liability (not just environmental) will be considered a material impact on earnings.

I read with interest a recent Forbes article which stated that the McAllen Edinburg Mission Texas area is ranked as the least toxic metro area in the country. The article stated that the parameters of the study were air quality, water quality, toxic material and the number of superfund sites. As a northerner, I can not comment on the water, air, industry and toxics of McAllen Edinburg Mission Texas; I don't even know where McAllen Edinburg Mission Texas is located. I can however comment on superfund. According to our database, EPA Region 6, southern states which includes Texas has over 200 consent decrees (legal documents where the parties, the government and judge have agreed) and Administrative Orders on Consent (consenting parties and EPA) agreements. EPA region 4, southeastern states (Florida and Georgia) has over 700 documents; and region 5, great lake states (Illinois and Ohio) has over 800 documents from the inception of superfund to the present. This may be due to increased industry in these parts of the country, but I speculate that it could be on the model that makes a site eligible for superfund clean-up. As a northerner, my concept of the panhandle of Texas is that groundwater is very deep and the distance between surface waters are far in between. The Superfund model includes the amount and type of toxic material flowing in surface water. Without this parameter the numbers are going to be skewed with less number of sites meeting the threshold for National Priority List status.

The Toxic Action Center, a Vermont non profit organization, recently published a report delineating the sources of hazardous waste released in the state. The study showed that the majority of the waste was disposed of by “Mom and Pop” stores, private residences; and not by heavy industry. These results statistically correlate with the information that EFIS maintains. EFIS has virtually all Consent Decrees and Administrative Orders on Consent for every National Priority List (NPL) Superfund Site in the country since the conception of CERCLA in 1980. The only site in Vermont on the NPL list undergoing clean-up action is the Bennington Municipal Landfill. Most likely homeowners and small companies disposed of their waste like kerosene, waste oil, old paint, pesticides, etc. at the local dump when that practice was permitted by law.

General Motors reached a settlement with EPA to pay almost $51 million to resolve it's allocated liabilities at 34 sites in 11 states. This amount is in addition to the $773 million clean-up liability encompassing 89 sites in 14 states at the end of 2010. $15 million is in cash, the remainder in warrants and stock. This new batch of sites appear to be multi party sites, whereas the previous 2010 settlement appears to be one party superfund (closed or active) facilities. Federal superfund sites include: Springfield Township Dump, Reclamation Oil, Forest Waste Products, H. Brown Co. and 68th Street Dump. This author is not sure if these amounts will have a material impact on earnings since the new company's stockholder equity will not be reported until after the new year; and materiality is 4% of stockholder equity. EFIS has or will soon have all available volumetric information, revised waste-in lists and EPA's cost recovery database for the entire country. Once this information is cross referenced with the Consent Decrees and Administrative Orders on Consent under Superfund (CERCLA), EFIS will be able to determine if this estimate is in fact true and accurate to resolve General Motors (GM) liabilities.

It has been reported that Hecla mining will pay in the neighborhood of $262 million to settle its share for an operable unit of the Bunker Hill Mining and Chemical site in Idaho. In December 2010, Hecla reported their stockholder equity as $962.25 million. Materiality is defined by the Financial Accounting Standards Board as 4% of stockholder equity which translates in Hecla’s case to approximately $38.5 million. This superfund liability is clearly a material impact on earnings and needs to be reported somewhere in their financial statements. Even after this liability has been paid, Hecla is still not out of the woods for Superfund liability. Doing a word search for Hecla in EFIS’s Superfund Information Service (SIS) resulted in the finding that Hecla is a responsible party to the following sites: Torch Lake, California Gulch, CSMRI, Petrochem Plant, Cyprus Tohono Mine, Coeur D’Alene Union Pacific RR/Trails and the Ross Electric/Coal Creek. Further research is required to determine if the listed sites have been removed or delisted from EPA’s National Priorities List (NPL). Additional research for the previously listed sites will be required regarding allocated volumetric information to determine if Hecla has other financial liability. [Allocated volumetric percentage x (EPA’s remedial actions cost estimate) minus funds already reimbursed]. Also, was Hecla offered de minimis status (one time payer, typically disposing low volume/low toxicity of waste at a particular site). In any case, Hecla will probably be required to pay a lot more to resolve their allocated share of Superfund liability. Accountants do not like estimates. Our recent economic downturn was mostly due to off-sheet balance expenses. Guess what?.....Superfund estimated liability is an off balance sheet item. Stockholders have the right to know how much!

The Whittier Landfill Superfund Site operated from 1976 through 1991 as a facility to treat and recycle used solvents. The site is contaminated with commercial paints and refrigerants. It is reported that 169 companies are named as responsible parties and will each pay $7 million dollars to this remedial cleanup action. Of all the thousands of Consent Decrees and Administrative Orders on Consent that have crossed my desk, I have never seen a settlement stipulating the average payment of all responsible parties. All the negotiated settlements I have seen state that the parties will either pay their allocated shares represented by a dollar amount and/or allocated waste amount; or the document state that the responsible parties shall reimburse x amount to the federal government (EPA is not concerned who pays just as long as the tax payer is reimbursed for the expenditures made). I hope this clarification helps resolve this inaccuracy in reporting.