MANHATTAN (CN) - Anadarko Petroleum Corp. will pay $5.15 billion in what prosecutors call the largest settlement ever for environmental contamination - $4.4 billion is earmarked for cleanups.
The settlement with the Kerr-McGee Corp. and affiliates, including parent Anadarko Petroleum Corp., ends a fraudulent conveyance case brought by the federal government and the Navajo Nation after the bankruptcy of Tronox Inc.
"If you are responsible for 85 years of poisoning the earth, then you are responsible for cleaning it up," U.S. Attorney Preet Bharara said.
"That's why this case was brought. And that's why the defendants are paying a record $5.15 billion - to fund that colossal cleanup and to make things right."
Bharara said the company tried to keep its money by playing a "corporate shell game" and turning its oil-and-gas business into a new entity while leaving behind a bankrupt shell.
"The company tried to cleanse its valuable business from its toxic legacy liabilities. Now the defendants will pay to cleanse the land and water," Bharara said.
According to the federal complaint and the December 2013 opinion of U.S. Bankruptcy Judge Allan L. Gropper, the old version of Kerr-McGee operated several businesses, including mining, processing radioactive thorium, creosote wood treating and the making of perchlorate, which is a component of rocket fuel.
The operations left radioactive waste across the Navajo Nation, radioactive thorium in Chicago, creosote waste in the Northeast, Midwest and South, and perchlorate waste in Nevada.
But the old version of Kerr-McGee decided that the liabilities associated with the contamination were a blight on its "crown jewel" business, the production of oil and gas.
The old company was abandoned and renamed Tronox, which was spun off as a separate company in 2006. The new company became insolvent and filed for bankruptcy in 2009.
As part of the settlement agreement, $1.1 billion will go toward cleaning up two dozen contaminated sites; $1.1 billion for cleaning up a former chemical manufacturing site that contaminated Lake Mead; $985 million for cleanup of uranium mines on land belonging to the Navajo Nation; $224 million to remediate thorium contamination in Gloucester, N.J.; and $217 million to clean up a creosote plant in Manville, N.J.