With deep pockets, AVX prepares for settlement, records show

Filing a motion to intervene last week, the Buzzards Bay Coalition has asked a federal judge to allow it to argue why the $366 million settlement should include a clause allowing the government to ask AVX for more money if the agreed upon figure is not enough to complete the harbor restoration.

But if environmentalists and the public figures that support them think the fight for the harbor isn’t over yet, AVX itself appears to disagree.

The electronic component manufacturer has already budgeted as though the settlement will go through, listing the full settlement amount as a liability in filings with the Securities Exchange Commission from fiscal years 2012 and 2013.

AVX is the parent company of Aerovox, a onetime electrical capacitor manufacturer whose factory was located near the Acushnet River on Belleville Avenue in New Bedford from the 1940s through the 1970s. During that time, the factory was the primary source of polychlorinated biphenyl (PCB) contamination in the harbor.

In its filings, AVX acknowledges that its settlement to clean the harbor of the cancer-causing toxins has yet to be approved by a federal judge and that “the timing of any such approval is uncertain.”

But that didn’t stop the company from recording “environmental charges” of $100 million in fiscal year 2012 and $266.3 million in fiscal year 2013 for expenses “related to environmental issues at the New Bedford Harbor Superfund Site.”

That charge actually resulted in a net loss of $64 million for the company in fiscal year 2013, despite the $1.4 billion in total revenue AVX made that year.

Representatives of AVX did not respond to three requests for comment. The SEC filing attributes the 2013 losses to both the Superfund charges and “uncertain global economic conditions” which resulted in overall decreases in sales prices.

Without accounting for the yet-unpaid settlement charge, the company actually had a net income of $202.3 million in fiscal year 2013. In fiscal year 2012, the company’s listed $152.8 million net income was actually $252.8 million without the environmental charges.

AVX still manufactures capacitors and other electronic components such as inductors and filters. Its parent company Kyocera Electronics Corporation, which acquired AVX in the 1990s and owns 72 percent of its stock, also manufactures electronics including components for wireless phones and solar power generation.

Kyocera also recorded the same environmental liability as AVX, listing it as “selling, general and administrative expenses” in its SEC filings for fiscal years 2012 and 2013.

Because of this, the filing states, Kyocera saw a 12.4 percent increase in selling, general and administrative expenses in 2013.

Still, the company had a net income of $671 million in fiscal year 2013 with annual sales of more than $14 billion.

Kyocera did not return two requests for comment.


The financial conditions of AVX and Kyocera were cited in a brief submitted to the court last week by elected officials from the Greater New Bedford community supporting the Buzzards Bay Coalition’s argument for a reopener clause.

The brief accuses AVX of financially abandoning the city “without paying its fair share” of the harbor cleanup.

The brief notes the companies’ annual revenues, saying that AVX’s financial responsibility to the harbor “cannot be characterized as a heavy lift.”

Sen. Mark Montigny, D-New Bedford, is one of many local officials who signed the brief, and said last week that the “simple question” of the company’s financial situation is “absolutely relevant” to the settlement decree.

“It is outrageous the taxpayers have paid anything on this cleanup for a mess this company created,” Montigny said.

The EPA does not consider the financial situation of a company found to be responsible for contamination at a Superfund Site, EPA Spokeswoman Kelsey O’Neil said.

“The only things that are considered are the facts and what is necessary to address the cleanup,” she said.

She noted that the negotiations were “years in the making” and that the $366 million figure was “not the first number that was discussed.”

Settlement discussions between the EPA and AVX started with “the actual estimated cost of cleanup,” which the EPA has previously said is $401 million.

O’Neil said she “couldn’t say exactly how we got” to $366 million because the agency was “negotiating with them over a long period of time.” But, she emphasized that the EPA “doesn’t look at the money they have, we look at the money we need.”

Montigny noted that AVX and Kyocera’s deep pockets mean they not only could pay for more of the harbor cleanup but also that they could “put their full weight behind the litigation” by spending large amounts of money on lawyers to fight any proposed settlement they do not like.


Neither Kyocera nor AVX is required to report how much they spend on legal expenses. But the companies must report how much they spend on lobbying Congress.

AVX has not spent any money on lobbying in recent years, but Kyocera spent $100,000 on the lobbying firm Global USA between 1999 and 2004, according opensecrets.org, which catalogues data from the Federal Elections Commission.

Two of the lobbyists associated with Kyocera used to hold positions in the federal government before becoming lobbyists, a practice commonly known as the “revolving door.”

One lobbyist, George Kopp, is listed as working with Kyocera as recently as 2007.

Before becoming Global USA’s executive vice president and general counsel in 1998, Kopp worked for the House Energy and Commerce Committee as its general counsel and later as staff director.

It was during Kopp’s tenure in Congress that the Energy and Commerce Committee sponsored legislation to ban the production and manufacture of PCBs in the United States.

Kopp left Global USA in 2012 to work for another lobbying firm, but his biography is still available on the company’s web site. There, it describes Kopp’s responsibilities as being a “liaison” between clients and “regulatory agencies on matters ranging from health care to the environment.”

Reached by phone Friday, Kopp said he was unfamiliar with Kyocera’s subsidiary, saying “I don’t even know what AVX is.”

He said the last project he worked on for Kyocera was “at least two years ago” and involved Chinese companies who were selling “heavily discounted” solar panel components and competing with Kyocera in American markets.

He also said he never worked on any projects with “any connection” to PCBs, and that despite his Global USA profile he “can’t remember having ever worked on a single environmental issue.”

“I don’t recall ever working with the EPA,” he said.


The New Bedford Harbor isn’t the only site that is potentially contaminated by AVX. The company has two lawsuits pending from properties abutting its factory in Myrtle Beach, SC. Those suits claim that property values have been negatively impacted due to migration of pollutants from the factory.

In one suit, currently being argued before a South Carolina judge, a luxury condo developer claims he was unable to find a bank loan due to groundwater contamination from the manufacturer’s property, according The State newspaper based in Columbia, SC. That property was contaminated not with the PCBs that line New Bedford Harbor, but with trichloroethylene, which also can cause cancer.

The condo developer is asking for $3.4 million in damages, including money the developer spent on engineering plans and permitting.

Representatives from both sides could not be reached for comment.

According to AVX’s filings, the cases have cost the company $300,000 in legal fees to date.

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