Steel mill polluted town as Romney firm profited

Associated Press Modified: August 13, 2012 at 3:02 am •  Published: August 13, 2012
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GEORGETOWN, S.C. (AP) — The rusty stains on Shirley Carter's home are a permanent reminder of her fight with the local steel mill, just down U.S. Highway 17 near the boat docks. No matter how many cans of industrial-strength acid she went through, the red tint on her property never seemed to go away.

In 1998, Carter and her neighbors sued Georgetown Steel, then owned by the company Republican presidential candidate Mitt Romney co-founded, Bain Capital. They sought millions in cleanup costs and accused the mill's owners of leaving their historic Southern neighborhood looking like it had been hit by a "chemical bomb."

State officials determined the mill was largely to blame for the pollution. As the lawsuit dragged on for years, the steel mill filed for bankruptcy and the plant ultimately settled with the residents.

In the end, Bain saw more than $30 million in returns on its steel company investment. Carter got $800.

"That wasn't even enough to paint the house," said Carter, who is a Romney supporter this election.

As a presidential candidate, Romney has pledged to roll back environmental regulations as a way to spur growth. Under President Barack Obama, he recently quipped, "a regulator would have shut down the Wright Brothers for their 'dust pollution.'"

But the story of Georgetown Steel shows how Romney's company thrived under conditions that largely allowed the emissions to continue for years, leaving locals to clean up the mess after Bain left town.

Asked to comment on the Bain legacy in Georgetown, the Romney campaign instead criticized Obama on unemployment and green energy projects. A Bain spokeswoman did not directly address the impact of the plant's emissions but instead said the firm "undertook an ambitious plan" to turn around GS Industries and invested millions of dollars into the company.

The Georgetown saga surfaced in the mid-1990s, when South Carolina environmental officials received complaints from a local resident asking why his boat kept turning red-orange. The phenomenon was more than a nuisance, like ash from a fire, as dust aggressively stained not only nearby boats but cars and homes as well.

The Georgetown residents' complaints came a few years after Bain Capital purchased the Georgetown mill and its sister plant in Kansas City, Mo., as part of a $24.5 million buyout deal. The parent company was later called GS Industries and became one of the largest producers of wire rods.

Bain Capital, a private-equity firm Romney co-founded in 1984, had an impressive track record by then. It would eventually buy dozens of troubled companies and help make them profitable, a skill Romney has trumpeted on the campaign trail as making him more suited to lead the country than Obama.

But amid Bain's profitable ownership of GS Industries, the plant's production had created unsightly byproducts. By the late 1990s, the red dust was so was so ubiquitous that those who lived in rustic, two-story homes near Georgetown's waterfront took to calling it "The Stuff" — a mineral called goethite that's used to make steel.

"Everybody talked about the red dust, The Stuff," said Marilyn Burkhardt, who owned a seven-room bed and breakfast with her husband before leaving town in 2000.

"My husband scrubbed the house probably every other week with a pressure hose," Burkhardt said. It was often difficult for guests to eat breakfast on the deck. "We had to work like crazy. And for what? Just to keep the outsides of our houses clean."

South Carolina regulators placed monitoring sensors around town and compared air-quality results with similar sites in the state capital, Columbia, and in Alabama. In turn, officials wanted to see improvements at the mill and at times cited the plant during Bain's ownership for environmental violations, records show.



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