Freedom Industries co-founder has been revealed as a two-time felon by investigators pouring over the chemical supply companies records.
The bad publicity for Freedom Industries deepens and continues. One of the founders of Freedom Industries, Carl Kennedy II, is a convicted felon twice over. A closer look at Freedom Industries, and its relationship with Kennedy, reveal some more surprises.
Following a the toxic spill of a chemical used in the coal industry, over 100 people have visited West Virginia hospitals. The leak, which came from a storage tank at a Freedom Industries tank farm, caused the water in nine West Virginia counties to be declared unsafe for anything but toilets. The spill and its aftermath have revealed some very interesting facts and relationships as investigators continue to pour over records.
The day of the leak, Gary Southern, the company’s president and co-founder, made it clear that his role was that of a job creator, and he had no interest in the effect the company had on the population. His comments were echoed by his girlfriend, who minimized the toxic spill saying that she took a shower and brushed her teeth and is “still alive.”
On Friday, the company filed for bankruptcy, effectively shielding them from dozens of lawsuits. Most of the lawsuits were filed by businesses that were forced to close their doors following the spill when a state of emergency was declared.
Southern, who signed the paperwork filed with the U.S. Bankruptcy Court in the Southern District of West Virginia, listed the company’s assets and liabilities between $1 million and $10 million. With at least 200 creditors, the company owes its top 20 creditors approximately $3.5 million.
Other investigators found evidence of a close relationship between Freedom Industries and the Koch brothers. Koch Industries, owned by David H. Koch and Charles G. Koch, is well known as influence buyers among Washington D.C. power brokers. Annual revenues for Koch Industries have been estimated to be approximately $100 billion.
Freedom Industries was specifically chosen in 2008 to be the distributor of Georgia-Pacific Chemical’s Talon brand mining reagents in eight states. Georgia-Pacific Chemicals is a subsidiary of Georgia-Pacific. G-P was bought by Koch Industries in 2005. Koch Industries is the wholly owned company of the Koch brothers.
Due to the brothers’ influence, Freedom Industries is exempt from many of the Environmental Protection Agency’s regulations. Claims that Freedom Industries merely stores, and does not manufacture, the chemicals, have allowed the company to sidestep many of the safeguards put in place to keep such a spill from happening. Additionally, since the company does not come under EPA policies, the company is given a lot of freedom in what they are required to do when a spill happens.
The company’s website claims the company was founded in 1986. Paperwork filed with the West Virginia Secretary of State says the company was actually founded in 1992.
Kennedy, the co-founder of Freedom Industries and two-time felon, is met on all sides by controversy. He was accused of tax evasion in 2005 over an issue dealing with employee withholding. For twelve months beginning in 2002, while serving as comptroller for Freedom Industries, he kept over $1 million from employees checks that were not paid. He pleaded guilty in the U.S. District Court, in West Virginia.
Subsequent investigations showed that Kennedy managed to hide a huge slice of his own personal proceeds from the IRS by using his status as an accountant to make sure a W2 was never filed in his name. Investigators found Kennedy used corporate monies for his own enrichment and wrote himself corporate checks, which he then cashed, for personal use.
Kennedy, sentenced to thirty-six months in prison, had his sentence reduced after he made some cocaine buys for police while being wired to record conversations. What’s all this about cocaine? Good question. It is not something that many know about.
This is the other felony of which Kennedy was convicted. In 1987, Kennedy pleaded guilty to selling almost a pound of cocaine. The related scandal cast a shadow over former Charleston Mayor Mike Roark, who ultimately resigned in disgrace.
While currently listed as “incorporator” with the Secretary of State, Freedom Industries told the press recently that Kennedy had left the company a decade ago. During bankruptcy proceedings in 2006, Kennedy told a different story. He testified that he owned portions of New River Chemical Company, Poca Blending and Etowah River Terminal. If those corporate names sound familiar, they are. They just merged with Freedom Industries weeks ago.
Freedom Industries may have more problems than just a co-founder who is a two-time felon and bankruptcy hearings. This is a story that just will not go away.
By Jerry Nelson