College loan debacle could get worse
Idaho firm blames Lewis & Clark for oil mess; school denies responsibility
As if losing $10.5 million to a bankrupt company isn't enough, Lewis & Clark College now has an environmental controversy on its hands.
After an oil processing company a year ago defaulted on the multimillion-dollar loan from Lewis & Clark and then declared bankruptcy, a bankruptcy trustee took possession of the company's Nampa, Idaho, plant in January, and plant operations were shut down.
Now, state regulators have cited several environmental violations on the property. And the president of the company is blaming the violations on neglect by the bankruptcy trustee and Lewis & Clark. The firm's president said the college took possession of the property from the bankruptcy trustee later in January.
The assertions by Tod Tripple, president of Environmental Oil Processing Technologies Inc., are in an affidavit filed last week in federal bankruptcy court in Idaho. But Monday, a lawyer for Lewis & Clark denied just about everything in the affidavit, including that the college has yet taken possession of the Idaho property.
What appears not to be in dispute is that the Idaho land has environmental problems. According to a filing in bankruptcy court, the state's environmental regulators inspected the company's Nampa plant in April and found several violations of state and federal environmental laws.
Before the company had the plant shut down, it processed used motor oil to make it more useable. Environmental violations at the plant, according to the Idaho Department of Environmental Quality, included failure to contain and minimize the release of used oil on the property.
But Tripple said in an affidavit filed Thursday in bankruptcy court that the plant was environmentally 'clean' when the court ordered the property closed in January and banned Tripple and his company employees from the property.
Tripple said in the affidavit that he conducted a tour of the plant for representatives of the college and the bankruptcy trustee in January and advised them of maintenance procedures that needed to be accomplished after Lewis & Clark took possession of the property.
'The instructions and warnings I communicated on Jan. 14, 2003, were based on the company's standing policy for nine years, during which time the company operated in complete compliance with state and federal laws,' Tripple said in the affidavit.
Tripple said in his affidavit that since January he had been 'made aware of several serious problems that have developed due to the neglect and mismanagement' by the bankruptcy trustee and a company that Lewis & Clark created to take possession of the property.
Tripple's affidavit said a sump pump at an oil unloading area 'was allowed to run over many times during the heavy rains of this past spring. É Barrels containing sludge were allowed to run over many times.'
But Richard Josephson, a lawyer for Lewis & Clark, said the bankruptcy trustee had taken precautions to ensure there was no environmental damage at the plant. And, Josephson said, Environmental Oil had been cited for similar environmental violation in past years.
'There are assertions in there É there are a number of incidents wrong and there a number of material facts É that are conveniently omitted,' Josephson said of Tripple's affidavit.
The issue is the latest wrinkle in an embarrassing episode for the college. Former Lewis & Clark President Michael Mooney made the loan to Environmental Oil in March 2001 without approval from the board of trustees. Environmental Oil defaulted on the loan in March 2002 Ñ without making any payments Ñ and declared bankruptcy last December. Mooney resigned last month after details of the loan became public.