This story has been republished with permission by Tennessee Lookout. Read the original story here.
Velsicol, a legacy polluter that manufactured pesticides, is proposing to hand over its 83-acre defunct facility in North Memphis to Tennessee as an environmental response trust. Should the Tennessee Department of Environment and Conservation accept a settlement agreement from the company, the state will be left to determine what to do with wide-ranging contamination including a baseball diamond-shaped pile of hazardous waste and a fluctuating groundwater plume of chemicals beneath it.
The proposal comes after the company faced questions this fall from environmental regulators and bankruptcy attorneys about inappropriate management and potentially fraudulent activity.
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These new allegations shocked environmental justice advocates and residents in the historically Black community neighboring Velsicol. They have long expressed frustration over the company’s slow efforts to clean up, now more than 20 years in the making.
The North Memphis plant’s closure in 2012 was already a staggering delay compared to the nationwide action prompted by Rachel Carson’s 1962 book “Silent Spring,” which exposed reckless pesticide production and application. As environmental policy changed and Velsicol plants shut down nationally in response, the Memphis facility continued creating these chemicals from a bygone era through the turn of the 21st century.
But even without a plant, the company has continued brokering chemicals in Memphis under the Resource Conservation and Recovery Act — a federal law designed to protect human health and the environment from hazardous waste disposal. Over the last few months, Velsicol has been undergoing its once-in-a-decade renewal process for its RCRA permit.
In September, the TDEC sent a “Notice of Deficiency” to the company that their RCRA application was incomplete, followed by 36 pages outlining missing data and unsatisfactory plans for soil contamination across its property. Now, Velsicol is proposing that it pay a $3 million settlement to TDEC over five years in exchange for a release of their permit obligations. TDEC estimates the company is still responsible for between $137 and $143 million in cleanup costs, according to claims it has filed as part of Velsicol’s Chapter 11 bankruptcy case. Velsicol did not respond to the Lookout’s request to comment, and TDEC declined citing pending litigation.
Velsicol disputes TDEC’s and other claims brought forth in its bankruptcy case, in which nearly 600 organizations allege that Velsicol owes them money. Among them is the District of Columbia, whose Office of the Attorney General sued Velsicol in 2022 for contaminating local waterways and wants them to be held financially responsible.
The District of Columbia’s legal counsel filed a motion to investigate Velsicol’s financial condition in October. They presented evidence that company leadership received $10.6 million in salaries, expense reimbursements, bonuses, and consulting fees from 2012 to 2023.
“Investigation is needed to review the excessive transfers made to the shareholders over the past five years,” the counsel wrote in the motion, signed by attorney Kevin Morse. “In addition to potential fraudulent transfers prior to the bankruptcy, the District is very concerned about the viability of [Velsicol] moving forward.”
Paying for contamination
Moving forward, Velsicol as a company will no longer be in Memphis, should things go according to its plan of reorganization as filed in bankruptcy court this November. But its toxic legacy will be long felt.
It’s still deep in the Wolf River, where fish absorb chlordane as they swim through waters contaminated with the chemical, which doesn’t break down easily. If people eat these tainted fish they could experience tremors, convulsions, or even death. Velsicol produced chlordane — a byproduct of a WWII nerve gas used by the Army — for commercial use starting in 1945. Although the Environmental Protection Agency (EPA) banned its use in the 1980s, the Memphis plant continued to manufacture it as the sole producer in the U.S. through the 1990s for international export.
By the time the EPA banned it, more than 30 million homes and commercial buildings had been treated with chlordane, with the chemical washing into streams and rivers throughout the country like in Memphis and Washington, D.C., as detailed in the District of Columbia’s first complaint against the company. The District anticipates spending over $35 million to address contamination throughout the city.
According to the District’s October motion, officials found it troubling that Velsicol had millions of dollars in claims but only offered to pay them back through discretionary income, or the money they have left after essential operating expenses. Payroll for the company’s eight employees — half of whom are the company leadership — has made up a substantial portion of their operating expenses in recent years, according to the motion.
An income statement from 2013 to 2023 shows that Velsicol’s gross sales fluctuated annually between approximately $11 million and $18 million over the last decade, but they turned a profit in only four of those years.
‘Modern day’ products and cleanup
Velsicol sells a handful of products that are used in the industrial manufacturing processes: hex, chlorendic, and benzoic acid. Branded under “Velsiflex,” these materials are building blocks to create other products like paint and caulk. On its website, Velsicol advertises them as “environmentally friendly” despite the chemicals having properties that only partially, or do not at all, dissolve in water.
These products are produced in Wuhan, China, by a third-party company in which Velsicol holds a 10% minority stake. Velsicol uses a variety of shippers and warehouses to transport and store the products to operate this “asset-light manufacturing model,” according to its joint plan.
Since the Tennessee Lookout began its investigation in Velsicol in 2022, the company has consistently maintained that it is not a manufacturer, according to documentation and public comment. In March during a meeting with 40 residents and environmental advocates, Vice President George Harvell, one of the company stakeholders, said, “Velsicol is not manufacturing any products anywhere in the world, and we just broker chemicals.”
Harvell went on to give conflicting remarks about whether any materials from Memphis are used in its modern-day products. Exactly what has been stored and shipped from the site in recent years is not well documented.
Since 1998, Velsicol has been working to reduce a subterranean plume — a mass of chemicals estimated to be 126 acres, roughly the size of Liberty Bowl Stadium — from over 80,000 pounds to 5,000 pounds, as reported in its 2024 cleanup report to TDEC.
In addition to the plume, Velsicol has been trying to clean up contamination along Cypress Creek, which flows by residential properties, parks and churches and into the Wolf River. Lab tests from last year revealed contamination exceeding the EPA’s limit at the neighboring apartments on 1215 Springdale Street, where aldrin, endrin, and dieldrin were found — chemicals linked to neurological, reproductive, and developmental harm.
When Velsicol extracts contaminated soil, it puts it in a large consolidation pile at the northwest corner of its property by railroads. Public records show that iterations of this pile go back as far as the 1960s, when “unknown amounts of debris” from the demolition of the pesticide production plant were disposed of in the 250-feet-by 250-feet area. TDEC officially dates the pile back to 2006, when a health investigation unfolded and Velsicol removed soil from Cypress Creek, adding to the heap.
In its recent deficiency notice to Velsicol, TDEC questioned whether Velsicol has been managing this consolidation pile correctly under their permit. Such a pile should be decontaminated or removed within 180 days when operating under specific rules for accumulating waste.
“The Division of Solid Waste Management believes that accumulating wastes in a non-permitted unit, without a Final Remedy in place, and without appropriate time limits is not appropriate or safe for the public,” the notice stated, signed by TDEC Hazardous Waste Program Manager, Beverly Philpot.
A toxic concern
Velsicol’s proposal to transfer their property to an environmental response trust—a legal entity managing contamination — is common in bankruptcy proceedings, helping prevent taxpayers from bearing cleanup costs. These trusts typically involve various responsible parties, including local governments and companies, who continue funding the efforts indefinitely.
But Velsicol wouldn’t have any further financial obligation other than that $3 million, according to their proposed settlement. Further, TDEC wouldn’t be allowed to sue. Velsicol is trying to set up a similar agreement with the U.S. Department of Justice, an entity also involved in the compliance of the company’s RCRA permit.
TDEC would not offer clarity on whether Velsicol’s permit ending would lead to a national Superfund site or state brownfield. While these designations share similar regulatory frameworks, they serve different functions: a RCRA permit manages hazardous waste, a Superfund addresses the cleanup of abandoned sites that pose national threats, and a brownfield refers to contaminated properties that are managed at the state level for redevelopment.
Former Velsicol sites have become Superfund sites across the country, most notoriously in Michigan where it has become one of the costliest such sites in U.S. history. Velsicol’s two West Tennessee landfills — one in the Hollywood community in Memphis and the other in Toone, an hour east of the city — were designated as Superfund sites and underwent remediation in the last few decades.
Superfund sites and brownfields typically have more government oversight, something that environmental advocates believe is necessary for the former plant site in Memphis. Even after cleanup, traces of their chemicals can linger, with polluted sediments potentially seeping down toward the Memphis Sands Aquifer, the region’s drinking water supply.
“It’s a concern, because it’s pesticides that have been banned and they’re in the soil and they’re toxic,” said Science Director for Protect Our Aquifer (POA), Scott Schoefernacker. “It’s as simple as that.”
For decades, the Memphis Sands Aquifer has faced slow-moving contamination from industrial sites across the city, enabled by government leaders who failed to push back against corporate bullying, such as Velsicol’s. Of the current 19 Superfund sites in Tennessee, about a third are within Shelby County.
It’s why people in North Memphis have not been surprised by Velsicol’s activity, as environmental justice issues have long been part of what some call Memphis’s economic playbook.
In the absence of government public outreach, organizations like Young, Gifted & Green and The Time is Now Douglass have hosted meetings in community spaces, including barber shops, to explain the re-permitting process. Additionally, POA’s Water Warriors training program is trying to make technical reports more accessible to the public.
That’s also par for the course in Memphis, as these advocates have filled in gaps when projects may compromise community wellbeing. Examples include crude oil pipeline proposals, cancerous emissions that went unchecked for decades, and most recently Elon Musk’s xAI facility that relies heavily on public utilities.
In the case of Velsicol, what’s surprising is that advocates are now beginning to wonder if public institutions—both agencies and the courts—may finally be stepping up to hold a long-time polluter responsible.
“I am (at face value) glad that there is some probing on financials particularly,” said LaTricea Adams, president of Young, Gifted & Green. “Memphis has a bad track record of polluters going bankrupt and no one being held accountable for poisoning entire communities.”
This work was supported by the Fund for Investigative Journalism.
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