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Former hog farm is big mess for state
Colorado is preparing legal action against company's owner
By Todd Hartman
Rocky Mountain News
Tuesday, February 21, 2006

What was once Colorado's largest hog farm is raising a new stink from regulators demanding that the company clean up heavily contaminated soil and water and pay overdue leases on thousands of acres of state land. Although National Hog Farms closed its doors six years ago, much of the site remains an abandoned mess that regulators say will cost well over $1 million to restore.

A veritable meat and manure factory, the operation sprawled over 23,000 acres east of Greeley, fattening as many as 150,000 hogs wedged inside jammed production buildings and saturating sandy grasslands with a river of swine waste gunned from industrial sprinklers.

Now, state officials are preparing legal action against the company's stockholder, alleging a litany of unaddressed environmental violations and the firm's refusal to pay more than $300,000 owed for leasing more than 5,000 state-owned acres - public land home to some of the worst contamination in the entire site.

And the latest move by its owner has only heightened tensions. Earlier this month, the company declared it was handing over all its stock to the State Land Board, an ill-fated attempt, state officials say, to wash its hands of any remaining responsibilities.

Regulators at the state health department have been dishing out cleanup orders and fines to the company since the late 1990s, culminating in a lawsuit filed late last year alleging the company has failed to comply with an array of requirements, including planting specialized crops to draw excess nitrogen from the nutrient-saturated soil.

In all, cleanup costs will likely exceed $1 million and are probably far higher, according to Scott Klarich, an environmental protection specialist at the Colorado Department of Public Health and Environment.

Meanwhile, National Hog Farms has refused to pay the State Land Board $313,000 in overdue lease payments. Earlier this month, in lieu of payment, it informed the land board it was turning over all its paperwork, company stock - even keys to a gate on the property - to the state.

That prompted an irritated response from the state attorney general's office, which informed the company's Houston-based lawyer that if he thought the firm could relieve itself of its obligations by relinquishing its corporate stock to the state, "You are mistaken."

The director of the State Land Board, Britt Weygandt, warned the company's owner, Mike Cervi, in a January letter that the agency would take him to court on the issue. "It certainly appears that we are on this path," Weygandt said in a recent interview.

Owner is doing time

Adding to the intrigue is Cervi himself, a 69-year-old Weld County rancher and businessman who bought the company's stock in 2004 and recently became a convicted felon.

Cervi is serving a five-month federal prison sentence in California unrelated to any issues at National Hog Farms. His offense: tampering with monitoring equipment in Weld County to hide leaks in underground storage of wastewater left over from oil well drilling - a felony violation of the Safe Drinking Water Act.

Cervi is slated for release March 10, according to the U.S. Bureau of Prisons Web site. He was sentenced in U.S. District Court in Colorado to serve an additional five months of home detention after his release, and was required to pay a $30,000 fine and provide 50 hours of community service by speaking to ranching and rodeo groups about his crime and time in prison.

The company's attorney, Edward Hartline, didn't return two phone messages seeking comment on the state's lease and environmental disputes with National Hog Farms.

Though Cervi owns the company's stock, the land and water that once belonged to National Hog Farms have been sold off. The first sale came in 2002, to an out-of-state land broker. The acreage sold again in 2003, according to Bob Lembke, owner of the neighboring 70 Ranch.

It was Lembke himself who purchased most of the site - some 14,000 acres. A smaller portion, about 4,500 acres, was purchased by Colorado Rockies star Todd Helton, Lembke said. The remaining 5,000 acres - much of the most contaminated land - belongs to the State Land Board.

The loss of land and water assets raises questions with state health officials about whether there's water available to grow crops such as sunflowers or alfalfa that cleanup regulators say are needed to draw excess nitrates out of the soil.

The situation also raises the possibility that, should the health department fail to hold Cervi responsible for cleanup, the State Land Board, as the landowner, could be stuck with the costly work itself.

State officials also appear to have concerns that water associated with the land board acreage may be in jeopardy. But state lawyers wouldn't discuss the matter, citing litigation in state water court involving the next-door 70 Ranch whose owner, Lembke, wants to provide more water to Front Range suburbs.

"I don't want to get into details, but the land board is (involved) in that case to protect its water interests," said Cheryl Linden, an assistant attorney general at the Natural Resources and Environment Section of the attorney general's office.

Lembke said he hasn't talked to the State Land Board about water rights, but "to my knowledge, they have no water rights they're claiming as belonging to the state" in the water court case.

Anschutz fought farm

It all adds up to a tangled mess for state officials who may face a long, litigious road if they ever hope to get anything out of Cervi or the company, once viewed as a small economic engine for the farming region in Kersey, east of Greeley.

Even in its heyday in the 1990s, with about 185 employees, the farm was at the center of a much-publicized fight with neighboring property owner Phil Anschutz, a billionaire known in Colorado for his railroads, for founding Qwest Communications and as a major political donor.

Anschutz, who owned a neighboring cattle operation known as Equus Farms, long complained about the stench coming from the hog farm and said it ruined hunting trips in the area. In 1998, he largely bankrolled the campaign for Amendment 14, which, backed by environmentalists, passed easily.

The amendment tightened regulations on large hog farms, which had drawn national attention from environmental activists and journalists in the 1990s because of the massive quantities of manure and liquid waste the operations produce.

The amendment forced hog farms to better manage their ecological impacts, including those from spreading liquefied hog manure across the land.

If too much waste is applied as fertilizer in the warmer months, the waste that isn't taken up by crops will seep into the soil and contaminate land and groundwater. In the colder months, when the ground is frozen, the waste has nowhere to go and creates odors.

Because of that, state health officials banned land application in winter, requiring many hog farms in the state to build lagoons to hold the waste. National was reluctant to comply, and was once cited for illegally land-applying waste 250 times in 1999 and 2000.

All along, the company's then- chief executive, Bill Haw, argued that state requirements were unreasonable.

Haw went on to blame regulators for his decision to shut down the operation in 2000, saying he couldn't comply with government demands. State health officials rejected the notion that the new rules put the company out of business.

Since then, the operation changed hands. But Cervi, the current owner, never resurrected the hog farm. Officials believe Cervi was interested in the State Land Board leases owned by the company and eventually wanted to run cattle in the area.

Nitrates endanger babies

But pollution remains. Regulators say groundwater in some monitoring wells is showing levels of nitrates 10 to 12 times higher than the health standard of 10 parts per million. Nitrates pose the greatest risk to infants, who can ingest the water when mixed with formula.

The nitrates can keep oxygen from flowing in the baby's blood. That low oxygen can lead babies to show blue-colored skin, hence an illness called "blue baby" disease. Other symptoms include diarrhea and vomiting. In severe cases, babies can have breathing problems.

Soil is contaminated as well, with elevated levels of phosphorous, nitrate and heavy metals, according to regulators and state documents. And the bulk of the contamination is centered on the State Land Board acreage.

Even so, no one is drinking groundwater from the area, and state officials concede the isolated site doesn't pose any imminent public health risk.

But state environmental laws still apply, and regulators say the company broke them on multiple fronts, from failing to monitor and characterize groundwater contamination levels to failing to complete a financial assurance plan that would have ensured enough money to conduct cleanup work.

The company prepared a partial cleanup bond of $250,000, which regulators have claimed. But National Hog Farms didn't obtain a bond necessary for all the cleanup work, Klarich said.

"We've done an initial version making real conservative assumptions and we believe the appropriate bond is likely greater than $1 million," Klarich said.

Famous names in the mix

  Mike Cervi:  Bought the company's stock in 2004. The hog farm went out of business in 2000.

  Phillip Anschutz:  Largely bankrolled campaign to tighten regulations on hog farms.

  Todd Helton:  Colorado Rockies star bought about 4,500 acres of the former hog farm site.

  Bob Lembke:  Neighboring rancher bought most of the hog farm land - about 14,000 acres.

http://www.rockymountainnews.com/drmn/local/article/0,1299,DRMN_15_4483498,00.html