Union Tribune

December 9, 2002 

Plan proposed to clean up toxic mess
Plant owner faces arrest for violations in Mexico

By JOE CANTLUPE 
COPLEY NEWS SERVICE 

Sometimes, Reinaldo Kahn worries that authorities from Mexico
will somehow slip across the border and take away his
87-year-old father, Jose, who faces arrest for creating one of the
worst toxic messes along the U.S.-Mexico border.

Still, a decade after Mexican investigators shut the Kahns'
lead-smelting plant in Tijuana, father and son continue meeting
with Mexican officials to figure out ways to clean up the site of
their former plant, Metales y Derivados.

For years, the meetings always on the U.S. side of the border
went nowhere.

The Kahns, who live in San Diego County, now believe they have
come up with a suitable plan to help finance a potentially $1
million cleanup of the old factory.

Specifically, they are resting their hopes on an application to the
North American Development Bank for a loan to help remove
6,000 tons of debris from the site.

Baja California officials have joined in as a sponsor of the funding
application, according to bank records.

The Kahns said they also have begun working with a Mexican
waste recovery company to take samples of battery acid and
other wastes left at the former Metales site.

Jose Kahn opened Metales in 1972 as one of Tijuana's early
maquiladoras, recycling lead from car batteries, the same kind
of work he performed decades earlier in Chile and Argentina.

The site is a few hundred yards from a small ravine and Tijuana's
colonia Chilpancingo, home to 10,000 people.

Since Mexican authorities shut the Metales plant in 1993,
mounds of lead slag, other waste products such as arsenic and
cadmium, copper and other materials are scattered in sacks and
drums, Mexican reports show.

Mexican authorities have "grave concerns" about possible
environmental hazards, according to one of the many reports
about the site.

Another report found levels of lead contamination in the
Metales vicinity an estimated 550 times above U.S.
Environmental Protection Agency standards.

Although some environmental advocates blame unexplained
rashes, allergies and other illnesses in the area on Metales,
authorities say more studies are needed. There also are dozens
of other maquiladoras in the nearby industrial park.

Since the Kahns told Copley News Service about their financial
proposal, U.S. authorities have reacted cautiously, taking a
wait-and-see approach.

Mexican authorities are calling the proposal a significant step
toward possible cleanup.

"We believe that this is a big step in the way to find the best
solution for everybody, including also the search for funds," said
Socorro Maldonado, coordinator of urban development
promotion for Baja California.

The elder Kahn, the majority shareholder in the company that
ran Metales for more than 20 years, also is optimistic. During a
recent interview, he appeared determined and steadfast, looking
anything but the wanted man that he is.

If he sets foot in Mexico, he acknowledged matter-of-factly, he
would be arrested for violation of environmental laws. He cited
an arrest warrant filed against him and his wife in 1995.

Kahn spoke in a thick German accent, his thinning hair swept
back as he sat behind a small desk covered with files in his San
Diego office suite.

Long-neglected water stains carved a path down a wall from the
ceiling in one corner of the office, which holds a metal cabinet
full of files from the Metales battery recycling plant.

Josef Kahn, who was born and raised in Germany and was a
student at the Sorbonne in Paris, said he fled Europe during the
rise of Hitler. In Latin America, people called him "Jose," and the
name stuck.

Metales was always a small operation, he said, adding that its
yearly output of recycled lead was what some companies
produced in a week.

"This didn't make me rich," said Kahn, who lives in Point Loma.

Since Metales was shut down, Kahn said, he has been in the
"buying and selling of scrap metal" business but can't afford to
clean up the Metales site.

Jose Kahn's middle-aged son, Reinaldo, operated the Metales
plant for years.

"It's taken 10 years out of my life," Reinaldo Kahn said, pointing
to the Metales files in his father's office.

He recently became a real estate broker.

The Kahns told a story of bureaucratic blunders including their
own and an unfolding environmental quagmire.

"We're trying to fix a problem; we all want a solution," said Jose
Kahn, a father of four and grandfather of seven. "No one wants to
walk away without a cleanup. We never abandoned the plant."

Wastes accumulated

Outside the Metales site, there is a sign warning "Stay Out" on a
broken fence. People occasionally wander around the property,
taking steel beams or other structures from the shell of the
building, environmental officials said. A homeless man has been
living around the property, even setting up a makeshift kitchen.

In the early years of the Metales operation, Kahn cheaply
disposed of some of his factory's wastes outside of Mexico, which
has few toxic-waste disposal sites. Some went to Utah, others as
far as Europe.

The Kahns said environmental crackdowns and financial
constraints left them little choice but to keep the lead slag piles
at the site.

Environmental officials on both sides of the border say the
Kahns wrongly allowed the wastes to pile up.

During negotiations with Mexican authorities over the years,
sources said, the Kahns often were criticized for failing to
generate a financing plan and for being too eager to make profits.

Cesar Luna, a policy advocate for the Environmental Health
Coalition, has called the Kahns' company irresponsible for
having operated "comfortably in San Diego with profits made in
Tijuana at the expense of residents and neighboring
communities."

A series of bureaucratic mistakes also may have undermined the
possible funding for a cleanup years ago.

When the company started business in Tijuana, it submitted a $1
million bond, according to Mexican records. Under terms of the
bond, the money was supposed to reimburse the Mexican
government if the business was responsible for environmental
or other problems, financial analysts said.

But a North American Free Trade Agreement document
questioned the bond's validity.

"There is no record that the bond guaranteeing the legal
obligations arising from the financial measures order was ever
executed," the document states.

U.S. officials, in recent interviews, said they have raised
questions about the bond, citing lack of accountability in
Mexican records.

Environmental advocates suggested the bond could have been
used by Mexican officials as collateral for a cleanup, but it never
was.

The Kahns also provided documents showing they had begun
creating a detailed plan to clean up the site before Mexico closed
it down. Although records show U.S. officials endorsed the plan,
Mexican officials rejected it.

That recycling plan would have cost about $350,000, the Kahns
said.

Earlier this year, the Kahns' first proposal for funding from the
North American Development Bank was rejected.

They recently came up with a new proposal for a loan of more
than $700,000. With Baja California officials joining as a
sponsor, the proposal is being seriously considered, bank
officials said.

Authorities said they hope the bank's initial loan, even if it falls
short, could begin excavation, although eventual cleanup costs
could reach $1 million. Neither the Kahns nor Baja officials
would disclose each party's responsibility for the loan.

Although the Kahns are sometimes wary about meeting with
Mexican authorities because of the criminal arrest warrant
hanging over the father, they say they now want solutions.

The Baja California official, Maldonado, agreed. Both sides want
to resolve "the problem as soon as possible," she said.