JEFFERSON CITY — One month after taking office, Gov. Mike Parson quietly waded into a legal dispute with international implications: more than 3,000 young people from La Oroya, Peru, are suing the Doe Run Resources Corp., accusing the lead company of personal injuries caused by the company’s smelter in their town, tucked in the Andes Mountains.
On July 3, 2018, Parson sent a letter to U.S. Secretary of State Mike Pompeo and U.S. Trade Representative Robert Lighthizer asking for “assistance†in moving the litigation from federal court in ºüÀêÊÓƵ to Peru.
The effort faltered, but the letter from the state’s chief executive demonstrates the Maryland Heights-based company’s continued pull in Missouri, six years after shutting down its once-notorious smelter in Herculaneum, 30 miles south of ºüÀêÊÓƵ.
The company, owned by New York-based Renco Group, a holding company controlled by billionaire , has argued the case should be transferred to Peru, where the pollution took place. But attorneys for the plaintiffs have successfully argued the case should stay in Missouri, where they said the company operated a “command center†that made management decisions for the La Oroya smelter.
People are also reading…
Exposure to even small amounts of lead can lead to permanent brain damage in children, according to the World Health Organization.
“We intend to obtain justice for these children who were innocent victims of lead poisoning from the actions of Mr. Rennert and his companies,†said Jerome Schlichter, of the ºüÀêÊÓƵ law firm Schlichter Bogard and Denton, the lead attorney in one ºüÀêÊÓƵ case against Doe Run.
Parson’s letter on July 3, 2018, was the first known act by the governor in support of sending Doe Run’s legal woes to Peru, but it wasn’t the last.
After Pompeo responded on Oct. 30, 2018 to Parson’s letter, not committing to any intervention, Parson sent two more letters this year in support of moving the lawsuit — one on Jan. 30 to the 8th U.S. Circuit Court of Appeals in ºüÀêÊÓƵ and a second on March 22 again to Pompeo.
“The impact of your involvement could be significant,†Parson told Pompeo in March, indicating the court could be persuaded to move the case if the State Department were to intervene with a “Statement of Interest.â€
According to court records, the State Department has taken no official action. Department representatives did not respond to a request for comment.
The Post-Dispatch obtained Parson and Pompeo’s correspondence through an open records request.
Kelli Jones, spokeswoman for the governor’s office, said Doe Run general counsel Matt Wohl approached the administration about the company’s legal problems.
“Our administration felt it can only be fair to have matters of Peruvian law decided in Peru,†Jones said, adding that Doe Run’s annual economic impact in Missouri is more than $1 billion.
“Corporations in lawsuits like this will often move to dismiss the case filed in a United States court,†said Constance Wagner, professor at ºüÀêÊÓƵ University’s Center for International and Comparative Law. “Plaintiffs would prefer United States courts because our judicial system is viewed as stronger†than courts in developing countries.
“Corporate defendants perceive that foreign courts in poorer/developing countries are weaker and there is less chance of plaintiffs winning a large damages award,†she said in an email.
Rennert, Renco and Parson
Rennert helped build his fortune in the 1990s through the issuance of junk bonds by Renco Group subsidiaries, leaving those subsidiaries, including Doe Run, with high-interest debt loads.
Starting in 1995, the Post-Dispatch reported in a 2002 investigation, Rennert’s subsidiaries had borrowed $1.1 billion, transferring $322 million of the proceeds to the Renco Group.
In 2002, the company was struggling under the weight of its debt obligations, and regulators were concerned about Doe Run’s ability to clean up pollution it had caused.
On Dec. 14, 2018, the Renco Group wrote a $25,000 check to Uniting Missouri, a political action committee in support of Parson’s 2020 election bid, according to Missouri Ethics Commission records.
Three days later, Rennert, the Renco chairman and CEO, contributed $2,500 directly to Parson’s campaign, Parson for Missouri, according to the ethics commission.
A review of Missouri state political contributions dating to 2003 shows no other contributions by Rennert or Renco. (Doe Run has contributed to Missouri politicians in the past.)
Jones did not address an emailed question about whether Rennert’s contribution factored into Parson’s involvement in the case.
She referred questions about the $25,000 Renco contribution to Uniting Missouri.
John Hancock, chairman of Uniting Missouri, said he hadn’t spoken to any Renco representatives about the donation.
“That’s the first I’ve heard of the court case,†Hancock said, adding that the contribution represented a small fraction of the $4.3 million the PAC has on hand.
Jim McCarthy, spokesman for Renco, said the donation to Uniting Missouri came during a fundraiser in ºüÀêÊÓƵ that included a roundtable discussion with Parson.
“Like virtually every substantial business in Missouri, Doe Run and its employees, through its PAC and others, have long supported a variety of Missouri candidates and officeholders on both sides of the aisle,†McCarthy said .
“It should come as no surprise that Renco would also support a governor who is focused on growing the economy in a state where Renco has a substantial investment,†he said. “Any actions public officials took in response to these concerns were those that they deemed appropriate to protect and advocate for the interests of Missouri and its citizens.â€
This isn’t the first time Missouri politicians have issued letters of support for Doe Run.
Court records mention a 2007 letter by then-Sen. Christopher S. “Kit†Bond and then-U.S. Rep. Roy Blunt, both of Missouri, to then-U.S. Trade Representative Susan Schwab that supported “due process†for Doe Run in tax litigation in Peru.
Parson sent the Jan. 30 letter to federal court the day before the U.S. and Missouri chambers of commerce filed friend of the court briefs in support of Doe Run.
La Oroya to ºüÀêÊÓƵ
In 1997, Doe Run acquired the La Oroya smelter from the Peruvian government, at the same time scrutiny surrounding its Herculaneum operation was beginning to intensify.
In 2007, Doe Run Peru became a separate sister company. The company went bankrupt two years later, and in 2017 the smelter was put up for auction by a group of creditors.
The Herculaneum smelter closed in 2013, following years of upheaval from local residents exposed to lead and tighter pollution standards by the federal government.
A ºüÀêÊÓƵ University study in 2005 found virtually all children under 6 in La Oroya, a town of 35,000, had lead in their blood. In 2007, La Oroya was named one of the world’s most polluted places, according to a report issued by the Blacksmith Institute that year.
That same year, a group of the children from Peru sued in ºüÀêÊÓƵ Circuit Court, alleging they were injured by emissions from the Doe Run smelter.
The case was later transferred to U.S. District Court in ºüÀêÊÓƵ, and lawyers are now in the pretrial evidence-gathering phase. U.S. District Judge Catherine Perry is presiding. She has rejected attempts to move the case.
Schlichter, the lead attorney in the case, said his firm is representing 1,400 plaintiffs, many of whom are no longer minors.
Beyond Renco and Doe Run, the lawsuit also names Rennert and executives, including Marvin Kaiser, Theodore Fox III, Albert Bruce Neil and Jeffrey Zelms.
A second case, in the ºüÀêÊÓƵ courtroom of U.S. District Judge Rodney Sippel, has 1,600 plaintiffs, according to court records.