CHARLESTON, W.Va. -- Nearly a week after Freedom Industries last spoke publicly, the company broke its silence Thursday evening, proposing a theory that its "Crude MCHM" chemical leak was caused, in part, by a broken water pipe uphill from its property, according to a source close to the company who demanded anonymity.The source said water from the broken pipe flowed under the tank farm, then froze during the recent cold temperatures and expanded, puncturing the tank from below."It looks like somebody took a sharp object and stuck it through the bottom," the source said.He said that even though the tanks were surrounded by a concrete retaining wall, they were sitting on gravel, so the chemical leak seeped through the gravel, into the ground and under the wall. State officials have described the retaining wall as shoddy and in need of repair. A representative with the Chemical Safety Board, which is inspecting the site, said Thursday that the tank sits on a concrete pad and the soil that surrounds the pad.West Virginia American Water replaced a leaking water line along Barlow Drive on Tuesday and Wednesday, according to a water company spokeswoman. Barlow Drive is where Freedom's tank farm is located.The leak of Crude MCHM, a coal-processing chemical, contaminated the Elk River and the drinking water of 300,000 residents of the Kanawha Valley.The Freedom source also attributed blame to what he called a very old terra cotta culvert that runs beneath Freedom's property and helped provide an avenue for the water to collect beneath the tank.
"No one is saying that this is absolutely how it happened," he said, "but there are photos of the inside of the tank that clearly show the upward puncture."The first West Virginia Department of Environmental Protection inspectors who arrived on the scene of the leak last Thursday described seeing a 400-square-foot pool of liquid at the base of the tank. They said a 4-foot wide stream of the liquid was flowing across the bottom of the containment dike and that the flow disappeared right at the point where the dike's wall connected to its floor. They said pressure from the leaking chemical created an "up-swelling," like a fountain of chemical coming up from the pool.The Freedom Industries source would not say if his theory was consistent with this description.The source also said Freedom did not have an umbrella insurance policy and that its policy is "inadequate to cover the amount of claims in this case."
He would not say who Freedom's insurance carrier was.As of Thursday afternoon, at least 20 lawsuits had been filed against Freedom Industries. Most of those also listed West Virginia American Water as a defendant.The source attempted to distance the two most visible company executives -- Gary Southern and Dennis P. Farrell -- from the company.Southern made Freedom's only public statement to date, at a brief news conference last Friday. Freedom was dropped by its public relations firm on Sunday.
Southern is identified as the company's president on filings with the West Virginia secretary of state, but the source said he is not a stockholder and has been with the company for only two or three years.Farrell is listed as president on the company's website and also in filings with the secretary of state.The source said Farrell also had no ownership interest and had sold the company to Chemstream Holdings, a company that was set up for the purposes of acquiring Freedom and its affiliates, Poca Blending and Etowah River Terminal.Those three companies, and a fourth, Crete Technologies, merged on Dec. 31, according to filings made with the secretary of state.The source said the owner of Chemstream Holdings, and now Freedom, is J. Clifford Forrest, who also owns Rosebud Mining, based in Kittanning, Pa.Forrest is listed as "manager" of Poca Blending and Etowah River Terminal in the merger filing.
Carl L. Kennedy II, Freedom's founder, who has two felony convictions, left the company in 2005, according to a secretary of state filing.Reach David Gutman at email@example.com or 304-348-5119.