WASHINGTON — Three environmental groups have accused Viacom of covering up a $300 million stink bomb left over from the days of its corporate ancestor Gulf & Western’s investments in the mining industry.
The Sierra Club, Citizen Action and Friends of the Earth have asked the Securities & Exchange Commission to investigate charges that Viacom failed to disclose the liability stemming from the late Gulf & Western chief Charles Bluhdorn’s mining investments.
Viacom inherited the liability for the cleanup when it purchased Paramount in 1994 for $10 billion.
“According to (the) Environmental Protection Agency, Viacom and its subsidiaries now are potential parties with financial responsibility for the environmental cleanup costs at more than 30 state or federal Superfund sites,” wrote the groups in a letter to the SEC.
Although Viacom mentioned its legal problems in relation to the Superfund cleanup in its 10-k, it never revealed the extent of its liability to shareholders, according to Michelle Chan, a policy analyst with Friends of the Earth.
Viacom says the environmental groups have grossly overestimated the environmental liabilities. “The $270 million cost that they attribute to six sites bears no relation to reality,” said Susan Duffy, vice president of corporate relations.
Duffy added that Viacom shares the liability for several of the sites with “hundreds of other companies.” In those sites it is likely that Viacom will pay a small fraction of the total cleanup costs.
Although the entertainment conglomerate has set aside cash to pay for its part of the cleanup, Duffy insisted the figure is not close to the $300 million claimed by the environmentalists.
Duffy would not reveal how much cash had been set aside for the clean-up, but she did note that the companies’ assets total almost $30 billion.