Local Agencies

City Government

Problems of toxic contamination went beyond the SOB into Binghamton's city building (where the mayor, fire and police departments, courts, and city council all had offices). The city building's ventilation system, it turned out, was connected to that of the State Office Building. Parts of the building were closed for nine months because of unusually high levels of PCBs. Worse, state janitors had tracked contaminated soot from the state building into the city building. The cleanup workers, like their supervisors, acted as if the only danger was in the SOB itself.

City employees were alarmed that the janitors were using city building restrooms to change from "bunny suits" (i.e., protective suits) into street clothes, that contaminated gloves were dropped in the hallways, and that toxic rugs were stored on the building's loading dock. Binghamton's personnel and safety director recounted that "the janitors apparently used the wrong doors when they were coming out of the State Office Build-

ing . . . The state thought the doors were locked that led to the city building and assumed that there was only one way to get out. But there are crash bars on the doors and so they could get out any way they wanted" (Byrne interview, August 13, 1981).

Workers in the county building, which is on the other side of the SOB, had fears of their own; two weeks after the accident some of them petitioned the governor: "This letter is being written to inform the powers that be that since the fire and explosion . . . we the undersigned have come in contact with the so-called PCB fallout. This has occurred either by use of county vehicles which were deemed safe after the mishap or by going to the basement to obtain vehicles" (Broome County Employees to Carey, February 18, 1981). The director of DOH's Office of Public Health, who later became a principal policymaker in that department, responded to the petition two weeks later: "This letter is to confirm receipt of your petition. This letter, however, should not be construed as concurrence of [sic ] any elements in the petition" (Haughie to County Employees, March 4, 1981).

As the media reported lax security and unnecessary hazards, local citizens, and especially city and county workers, became increasingly concerned about risks to their health. Many agreed with the Binghamton mayor, who complained that "there were inadequate precautions taken after [the janitors] came out of the building . . . It was like letting a wild dog run loose and start taking a bite out of everyone on the leg" (Libous interview, November 30, 1981). Local politicians called for more stringent discipline at the SOB and asked the state to test and decontaminate the city building. The president of the city council raised questions about potential health threats after OGS and DOH acknowledged that dioxins were in the soot. She wrote a letter to the mayor, with copies sent to, among others, the commissioner of the state health department:

I am extremely concerned, given the recent disclosure of the presence of lethal [dioxin] in the State Office Building . . . I am appalled at what appears to be a deliberate minimizing of the dangers to avoid panic, and the apparent lack of concern and knowledge involving the ramifications to the residents and employees of our community. (Eggleston to Libous, March 2, 1981)

Dr. Arnold Schecter, director of the county health department, shared these reservations and issued a Commissioner's Order on March 4, 1981 (partly in response to reports that contaminated vehicles were still being used), stipulating that anything taken from the building must be returned. Although this order should have had the force of law, no one paid much attention to it.^[1] BCHD received complaints about automobiles that had been taken out of the garage even after the order was issued. The state took no subsequent action concerning the contaminated vehicles, and only a few files were returned as a result of the order.

The lack of adequate controls on the egress of toxic chemicals from the State Office Building clearly frightened employees, customers, and citizens. Along with reporting the events, the media also helped to frame the problem by using other disasters for comparison. Geographically, Binghamton is about midway between Love Canal and Three Mile Island, a fact that rendered the comparisons even more apposite. Unfortunately, Governor Carey confused public alarm with public hysteria, dismissing the possibility that the public may have had some cause for grievance:

You've got to take PCBs in quantities, steadily, over long periods of time, and probably be pregnant, which I don't intend to become. It gets into your fatty tissue, and then you get a PCB contamination. I'm not dismissing it, because I've spent too much time on Love Canal to [think] that there aren't serious conditions [in Binghamton] that need our help . . . But I'm telling you, these things become overblown. (unpublished portion of transcript from Carey's press conference, March 17, 1981)

Two pregnant workers in the city building thought they might indeed have "serious conditions"—one requested a transfer to a job in another building. The other woman, on her physician's advice, quit her job and filed suit against New York State for $310 million. (She filed for $40 million, her husband for $10

[1] One member of the State Senate, whose office was in the SOB, arranged to have a piece of Steuben crystal taken from his contaminated office. "I have it in my office in Albany," said the senator. "If you cannot clean up glass, I don't know what you can clean up" (Anderson interview, August 20, 1981).

million, and $80 million was claimed on behalf of the fetus; the lawsuit also demanded $60 million in punitive damages for each of the three. The child was born healthy.)

After the local newspapers reported that the janitors were flushing toilets in the SOB (violating a directive from the New York State Department of Environmental Conservation), thus breaking the seals of their protective gear and sending toxic chemicals to Binghamton's sewer system, the chairperson of the city's Municipal and Public Affairs Committee issued a press release in which he claimed he felt compelled

to seek out the answers to questions that have been posed concerning the direct effect of this situation upon all who must use City Hall. . . . I also feel that questions concerning the environmental impact of this disaster on the City of Binghamton as a whole must be answered. . . . The concerns of the citizens, City workers, City shoppers and City businesspersons are important to each and every member of City Council. (Testani, March 2, 1981)

The same day, this official sent a letter to Dr. Schecter asking about chemical testing and the risks of toxic chemicals:

It seems as though a day does not pass without more bad news being revealed about the chemicals released in the New York State Office Building. As Chairman of Binghamton City Council's Municipal and Public Affairs Committee and as a resident of the City of Binghamton, I am deeply concerned about the apparent deterioration of events at the Governmental Plaza. With the priority being given these events in the news media, the inquiries to City Council from our constituents, City employees, and other employees of downtown Binghamton are increasing by leaps and bounds. (Testani to Schecter, March 2, 1981)

These statements are especially notable because they show that the city council was pressed by its constituents and others to take a stronger role in what had become a highly politicized controversy. As is often the case in politics, however, words were not followed by action. Once the state health department assured city officials that toxic levels within the municipal building were safe and claimed the chemical releases to the sewer system were unimportant, city government agencies showed

little further interest. Although the president of the city council believed the state had treated workers and the public as "guinea pigs," the city council did no more than write a few letters to health officials and the media. One member of the city council remarked that they did not usually shy away from political battles but felt "they were almost thankful not to have to stick their noses into this one." Some initial concern was expressed over what the SOB accident might cost the city. But the mayor remarked: "The cost to the city will be zero. As far as I'm concerned, the state will pick it up" (East 1981). For the most part, city agencies, despite pressure from the media and workers, were able to define the problems created by the State Office Building as outside their proper mandate.

Local Business

There is a qualification to the conclusion that the city was unresponsive, for local businesses fell within the city government's definition of its responsibilities. Owners of downtown businesses claimed that fear of the contaminated building was preventing many customers from shopping downtown, causing a precipitous drop in revenues. A score of downtown merchants, led by store owner Bruce Drazen, sought relief for their economic problems.^[2]

Drazen contacted the governor's office to request that a state of emergency be declared in the downtown area, which might have qualified Binghamton for federal assistance. Acting on behalf of worried business owners, Drazen wrote to the governor's

[2] The data on Binghamton's business community come from interviews with key city officials; letters and memoranda exchanged between government officials at all levels; and two lengthy interviews with Bruce Drazen, a leader in Binghamton's business community. I conducted one of these interviews, and an informant in Binghamton, who had a greater rapport with Drazen than I did, conducted the second. (I found a general distrust among businesspersons of anyone seeking information on the SOB.) I sent a list of pertinent questions to the informant, who taped the interview. Drazen also provided some of the correspondence I cite. I interviewed other businesspersons, all of whom would speak only on guarantee of anonymity. These interviews substantiated Drazen's account of both the reaction of the business community to the accident and the attempts to obtain financial aid.

office in June: "The PCB dioxin disaster which struck our center-city [in] February, 1981 has caused a reduction in retail business which has clearly reached massive proportions" (Drazen to Burns, June 5, 1981). Drazen explained that he had surveyed a cross-section of retail businesses downtown, provided figures of revenue declines ranging from 11 percent to 60 percent (most were more than 25 percent), and concluded that there was an "immediate danger of losing the entire downtown retail community." The letter ended with a dramatic appeal: "TIME IS OF THE ESSENCE. We are crippled and operating on a day-to-day basis. WE NEED HELP." In addition to the survey, Drazen collected a large set of statistics that in his view conclusively tied profit losses to the accident: "I had a substantial file on the economic effect of the PCB thing on business downtown. I got the thing together and took it to a lawyer in New York [City] in consideration of a class-action suit against the State of New York, and they lost the file" (Drazen interview, February 15, 1983).^[3]

Without a detailed study of business revenues, it is difficult to ascertain that the business losses were indeed caused by the contamination of the State Office Building, as business owners claimed. (All of the firms were or are privately owned and varied in size from corner delicatessens to Binghamton's largest department store, Fowler's, whose downtown store subsequently went out of business.) Further complicating the issue is the fact that a large shopping mall outside the city limits had been drawing customers away from the central business district. In addition, a large urban-renewal project in the downtown area had restricted the flow of traffic, so downtown businesses were already in a recession. It is therefore likely that the downtown business community would have experienced a bad fiscal year even without the problems caused by the SOB.

There is some evidence, however, that the SOB accident did

[3] The possibility of a class-action suit was not pursued. Drazen argued: "We could try . . . but it would be hard to find a law firm to do it. You have to have massive dollars up front, and nobody [i.e., the business owners] is willing to do that, and no law firm is going to take it on a contingency basis." Neither Drazen nor anyone else I spoke with had retained copies of the raw data they collected.

hurt local business. After the business community's initial requests for assistance, the New York State Department of Commerce conducted its own cross-sectional survey of the principal retail stores in downtown Binghamton. It compared the volume of business from March to May 1981 (the first three months after the accident) with the same period in 1980. Most of the businesses reported revenue losses of between $25,000 and $90,000; one attributed a loss of $308,000 to the State Office Building. Furthermore, the mall had been built nearly ten years before the accident, and although customers were indeed drawn to it, the lost business did not seriously threaten downtown Binghamton.^[4]

Binghamton's business leaders enlisted the support of the governor's secretary, who wrote to the acting regional administrator of the Small Business Administration (SBA) in New York City. Citing the large drop in the volume of business (and noting that the declines had been verified by the state Department of Commerce), the governor's secretary asked the SBA to "provide assistance to enable these businesses to return to their former levels of operation." The businesses were requesting low-interest loans to allow them to bolster their dwindling profit margins. One method of qualifying for disaster loans under the provisions of the Small Business Act is for a governor to certify to the administrator of the SBA that a troubled area has "suffered economic injury" (United States Commerce and Trade Code 1982).

Binghamton's mayor requested the governor's support on July 10, 1981. The governor then wrote a letter to both the regional office of the Small Business Administration and SBA's national director in Washington, D.C. To qualify Binghamton for the loans, the governor asked that the city be accorded an "economic dislocation designation." The business owners and the mayor were sent the following information quoted from the Small Business Act:

[4] It should be noted that the entire country was in a recession at the time; the business owners did not attribute all their troubles to the SOB. They did, however, see it as critical in causing the loss of some establishments and reduced revenues for those that remained.

Such loans are to be made available to small concerns suffering substantial economic injury as a result of situations such as severe weather when a physical disaster declaration has not been made and SBA's economic injury disaster loan program is not available; examples are the lack of snow affecting ski resorts and the Mexican currency devaluation which . . . reduced the purchasing power of Mexican residents at U.S. businesses.

Members of Binghamton's business community did not simply rely on regional administrators or depend on state government to pursue their interests. Some traveled to Washington, D.C., to lobby for support. Their conversations with Senator Alfonse D'Amato (R.-N.Y.) resulted in the senator's request that the SBA administrator meet with the Binghamton delegation. At the bottom of his letter, the senator appended, in script: "Mike, this is a critical situation deserving of your support. I'm counting on you to help!" (D'Amato to Cardenas, July 13, 1981).

The owners of these businesses thought they had an obviously valid case to present to the Small Business Administration. Some had received low-interest, long-term SBA loans in the past, and their present calamity was clearly real. Drazen himself said he had once received a thirty-year loan at 1 percent interest, simply because one of his stores had been flooded by heavy rains. (As he declared, "That's a bailout for an emergency!") With firm statistics and toxic chemicals, it seemed incredible they would be turned away. Said Drazen: "We had all the tangible evidence we needed. We had a study by the state Department of Commerce, and we had a request by Governor Carey for a state of emergency. But it was to no avail. The [federal] government's position was, 'if we help you, we are liable to be responsible for these kinds of things all over the country'" (Drazen interview, February 15, 1983). The group was told they would have to take their troubles to Congress. But the Binghamton case was not receiving media attention comparable to that accorded, say, the Love Canal disaster, so Congress was not likely to be much help.

In the end, the lobby was unsuccessful. Even though SBA officials acknowledged that the fiscal losses were caused by the

SOB, they apparently did not judge the accident at the State Office Building a genuine disaster. On August 4, 1981, SBA's Office of Disaster Policy responded to the governor's request with the following telegram:

Please be advised that on July 31, 1981, Administrator Cardenas of the Small Business Administration declined your request for an economic dislocation designation for businesses in the city of Binghamton, New York, which are suffering substantial economic injury as a result of the contamination of the state office building  . . . The situation . . . did not appear to meet the criteria of the economic dislocation loan program. (Jennings telegram to Carey, August 4, 1981; emphasis added)

Business leaders felt abandoned. One of them felt the SBA "would not touch us with a ten-foot pole." It was clear to them that the State Office Building accident had cost jobs, profits, and emotional stress. Twenty-nine businesses were prepared to ask for low-interest loans that, if granted, would have totaled $3.35 million. But they were not offered the loans they requested. Instead, they were offered loans at going interest rates—rates available from a commercial bank. Drazen wryly remarked: "They offered money, but they offered it at 16 percent and a six-year payback. And they wouldn't lend it to anybody unless they put up their house, their wives, their children, and had other collateral. That's loan sharking, not emergency loans" (Drazen interview, February 15, 1983). Only one store took a $100,000 loan at a 17 percent interest rate. That store and several other businesses have since gone bankrupt or had to sell their assets.

It is interesting that the Small Business Administration did not consider the State Office Building situation serious enough to qualify for disaster loans. If the local businesses could have claimed that their losses were caused by a riot, or civil disobedience, or toxic contamination of their products, they might have been able to secure SBA's disaster loans (United States Commerce and Trade Code 1982). It is hard to imagine that the lack of snow at a ski resort would be considered disastrous but that contamination of the magnitude that occurred at the SOB would not be so defined. There is one difference, however,

for our purposes, between an afflicted ski resort and business losses caused by a contaminated office building. In the latter case, public health is threatened by exposure to noxious materials. But this consideration is irrelevant to the SBA. Neither the Small Business Administration nor the SBA legislation was designed to mitigate health threats.

The downtown businesses were unable to get their loans because they could not find an appropriate bureaucratic label for the contingencies posed by the toxic accident. Customer fear is not considered a cause for "economic dislocation"; to have considered it thus would have required the creation of a new rule. The only other possibility was to ask that Binghamton be formally declared a disaster area. The bureaucratic distinction between an "emergency" and a "disaster" is not very meaningful in terms of qualifying for low-interest loans. But business owners in Binghamton perceived that a formally announced federal declaration that the downtown area was a disaster area (possibly conjuring up images of Love Canal) might scare away those customers still willing to shop there. The SBA seems to have taken advantage of the ambiguity inherent in the situation to avoid the negative economic effects of the SOB.

Despite the fact that the mayor went to Washington to ask for help, and despite the governor's appeal to the SBA, business leaders eventually concluded that government officials were neither much help nor overly concerned about their problems. After the group met with assistants in Senator D'Amato's office, and D'Amato helped to arrange the meeting with the SBA administrator, the senator asked the business owners to direct any further correspondence to his regional representative in Syracuse. Binghamton's mayor had no further alternatives for action, and the governor apparently did no more than send his letter of support to the SBA.

Binghamton's various government agencies limited their definition of unacceptable risk to that which threatened local business. Other risks, such as health risks posed by the chemicals, were considered the responsibility of the more powerful state-level organizations. Before drawing more conclusions concerning the inaction of the city government, let us examine the responses of other agencies to similar demands.