Search Results for: Banking

Did We Learn Nothing From the 2008 Crisis?

(AP Photo/Evan Vucci)

September 2008 was a whirlwind month for Michael Grynbaum, then a markets reporter for the New York Times. A self-described “newbie” to the paper’s business desk (he had previously worked on the metro desk), Grynbaum was immediately thrust into reporting on a financial maelstrom, a period which included the collapse of Lehman Brothers (otherwise known as the largest bankruptcy filing in United States history), the sale of Merrill Lynch to Bank of America, the transformation of Goldman Sachs and Morgan Stanley into bank holding companies, and what very well could have been the collapse of the nation’s economy.

Among Grynbaum’s responsibilities was “covering all the daily market plunges and the economic reports,” he told me, which meant he was busy that September, trying to keep pace (along with the other Times reporters like Andrew Ross Sorkin, Jenny Anderson, Eric Dash, and Michael de la Merced, among others) with a tumultuous flurry of daily breaking news. “As a reporter, you couldn’t divert your gaze for one minute,” says Diana B. Henriques, then a senior financial writer for the Times. “It was like an atomic blast, with ripples going in every direction.”

One of those ripples was the House of Representative’s September 29th vote on a $700 billion economic rescue plan; despite pleas from both President George W. Bush and Treasury secretary Hank Paulson, the House voted down the bill, 228-205, a move which prompted the Dow Jones Industrial Average to fall nearly 800 points.

Grynbaum remembers reporters and editors gathering around TV screens scattered about the Times’ newsroom to watch the landmark vote, and as it became clear the proposal (which entailed using taxpayer money to buy and absorb troubled assets) would fail, “an eerie silence fell over the newsroom,”he says. And then, “The Bloomberg machines started flashing red: the market was plunging.” He soon realized on that late September day a decade ago that he had to write the “breaking story about a historic stock collapse.”

“Everyone was working on adrenaline, aware of how consequential this moment was,” he says of the coverage:

At 1:30 p.m. the House began to vote on the rescue package that Mr. Paulson and Congressional leaders negotiated over the weekend. About 10 minutes later, when it became clear that the legislation was in trouble, the stock market went into a free fall, with the Dow plunging about 400 points in five minutes.

At his home office in Great Neck, N.Y., Edward Yardeni, the investment strategist, received terse e-mail messages from clients and friends. “Is this the end of the world?” one asked. Another sent a simple plea: “Stop the world, I want to get off.”

At some point, Grynbaum thought to call his parents, suddenly aware of the affects a stock market free-fall would have on their 401(k)s and portfolios, which were “taking a massive hit.” Ten years later, and another Great Depression averted, and Grynbaum can recall those weeks with some necessary and illuminating perspective, adding, “It was a thrilling and slightly scary time to be covering Wall Street.”

To others intimately involved with the roller-coaster fall of 2008, like Gary Cohn, then the president of Goldman Sachs, that same sense of measured introspection is notably lacking.

Since resigning as the director of the National Economic Council, Cohn has emerged as arguably the lone sane voice operating within the current chaos—aka within the Trump administration. First there were reports of his near-resignation following President Trump’s comments on the violence in Charlottesville, VA, and Bob Woodward’s recently published Fear alleged Cohn removed letters from Trump’s desk, thus saving trade agreements with several countries. During a period in which many feel as if they are vainly screaming into a void, Cohn’s protests—real and alleged—have endeared him to those looking for any sort of official resistance.

But that aura shattered around the time of the collapse’s ten-year anniversary. During an interview with Reuters, Cohn outlined the primary cause of the financial crisis, and surprisingly, the former Goldman exec largely laid the blame on Main Street’s front porch, saying,

“Who broke the law? I just want to know who you think broke the law. Was the waitress in Las Vegas who had six houses leveraged at 100 percent with no income, was she reckless and stupid? Or was the banker reckless and stupid?”

Cohn’s comments echo a popular opinion for many of those in the financial industry, and yet, that doesn’t disqualify his statements as anything less than mind bogglingly obtuse. It’s easy to navel-gaze in an attempt to diagnose the financial near-collapse and subsequent recession: yes, Americans became entranced with debt—at the bubble’s peak, the average American owned 13 credit cards—and yes, people flagrantly spent, running up an average household debt of roughly $15,000. But to absolve Wall Street and its employees is negligent, and ignorant that Wall Street became just as cozy with risk. Lehman Brothers and its ilk posted leverages (or the debt to equity ratio) of $30-plus to $1, and the notion that these investment firms, which were in the midst of accumulating massive annual profits (and bonuses for its executives), heeded any attempt to self-regulate proved farcical.

So yes, while that waitress accumulated homes (a fictionalized anecdote that borrows heavily from Michael Lewis’s The Big Short, which recounts a similar—but not exact—instance), Wall Street was creating—and profiting spectacularly off of—the vehicles that allowed people to gamble so recklessly. The events of 2008 were the result of one massive feedback loop: the embrace of a free market economy led to lax oversight of financial firms, which enabled banks to pursue strategies that would lead to tumescent payouts. As the housing market was seen as the bedrock of the American economy, those strategies sought to commercialize that stability, and thus complex and complicated securities and derivatives like CDOs, MBSs, and CDSs were born; everyone wanted to get rich now, and those catchy acronyms allowed both the American people and banking execs to plunge ahead. Greed on Wall Street fueled greed on Main Street (and vice versa), until the very thing that inflated the bubble—debt—was so overextended that it had no other option but to fail. The illusion couldn’t hide anymore.

Cohn may have been the sanest person in the White House, but that he would lay the blame squarely on Main Street is utterly preposterous, and suggests a lack of nuance and perspective that—ten years after the nation’s economy nearly collapsed—is frightening. In Margin Call, a 2011 film which is arguably the best depiction of the financial crisis, Jeremy Irons plays the CEO of an investment bank that, thanks to the levels of risk it carries on its books, is threatened with extinction. After a 24 hour period in which the firm survives by unloading its risk onto Wall Street (thus eliminating its own exposure but contributing to the toxicity that soon engulfs the financial world), Irons justifies the bank’s actions:

It’s just money. It’s made up. Pieces of paper with pictures on it so we don’t have to kill each other to get something to eat. It’s not wrong. And it’s certainly no different today than its ever been. 1637, 1797, 1819, ’37, ’57, ’84, 1901, ’07, ’29, 1937, 1974, 1987—Jesus didn’t that fuck me up good!—’92, ’97, 2000, and whatever we want to call this. It’s all just the same thing over and over. We can’t help ourselves. You and I can’t control it, or stop it, or even slow it, or even so slightly alter it. We just react, and we make a lot of money if we get it right, and we get left by the side of the road if we get it wrong. And there have always been, and there always will be, the same percentage of winners and losers. Happy fucks and sad sacks, fat cats and starving dogs in this world.

That speech is a perfect encapsulation of what happened in 2008. There is none of this equivocation of whoever deserves a greater share of blame, and Irons’ monologue contains more truth and accuracy than anything Cohn is peddling on his rehabilitation tour.

Hiking With Nietzsche

AP Photo/Keystone/Desair

John Kaag | Hiking with Nietzsche | Farrar, Straus and Giroux | September 2018 | 30 minutes (6,007 words)

 

I often tell my students that philosophy saved my life. And it’s true. But on that first trip to Sils-Maria—on my way to Piz Corvatsch—it nearly killed me. It was 1999, and I was in the process of writing a thesis about genius, insanity, and aesthetic experience in the writings of Nietzsche and his American contemporary Ralph Waldo Emerson. On the sheltered brink of my twenties, I’d rarely ventured beyond the invisible walls of central Pennsylvania, so my adviser pulled some administrative strings and found a way for me to escape. At the end of my junior­ year he handed me an unmarked envelope—inside was a check for three thousand dollars. “You should go to Basel,” he suggested, probably knowing full well that I wouldn’t stay there.

Basel was a turning point, a pivot between Nietzsche’s early conventional life as a scholar and his increasingly erratic existence as Europe’s philosopher-poet. He had come to the city in 1869 as the youngest tenured faculty member at the University of Basel. In the ensuing years he would write his first book, The Birth of Tragedy, in which he argued that the allure of tragedy was its ability to harmonize the two competing urges of being human: the desire for order and the strange but undeniable longing for chaos. When I arrived in Basel, still a teenager, I couldn’t help thinking that the first of these drives—an obsessive craving for stability and reason that Nietzsche termed “the Apollonian”—had gotten the better of modern society.

The train station in Basel is a model of Swiss precision—beautiful people in beautiful clothes glide through a grand­ atrium to meet trains that never fail to run on time. Across the street stands a massive cylindrical skyscraper, home to the Bank for International Settlements (BIS), the most powerful financial institution in the world. I exited the station and ate my breakfast outside the bank as a throng of well-suited Apollos vanished inside on their way to work. “The educated classes,” Nietzsche explained, “are being swept along by a hugely contemptible money economy.” The prospects for life in modern capitalist society were lucrative but nonetheless bleak: “The world has never been so worldly, never poorer in love and goodness.”

According to Nietzsche, love and goodness were not realized in lockstep order but embodied its opposite: Dionysian revelry. His life in Basel was supposed to be happy and well-ordered, the life of the mind and of high society, but upon arriving, he fell into a fast friendship with the Romantic composer Richard Wagner, and that life was quickly brought to an end. He’d come to Basel to teach classical philology, the study of language and original meanings, which seems harmless enough, but Nietzsche, unlike many of his more conservative colleagues, understood how radical this sort of theoretical excavating could be. In The Birth of Tragedy, he claims that Western culture, in all of its grand refinement, is built upon a deep and subterranean structure that was laid out ages ago by Dionysus himself. And, in the early years of their friendship, Nietzsche and Wagner aimed to dig it up.

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The Top 5 Longreads of the Week

HSBC
(Keith Tsuji/Getty Images)

This week, we’re sharing stories from David Dayen, M.H. Miller, T. Cooper, Caren Lissner, and Michael Adno.

Sign up to receive this list free every Friday in your inbox. Read more…

Inhuman Resources

Longreads Pick

David Dayen tells the story of Mike Picarella, an HSBC banker who witnessed a coworker being repeatedly sexually harassed and had his life ruined after he reported it to HR. The account shows how power imbalances within the banking industry prevent whistleblowers from coming forward and why there have been so few #metoo stories that have come out of Wall Street despite its notorious frat boy culture.

Published: Jul 12, 2018
Length: 41 minutes (10,400 words)

Alabama’s History Haunts, But It Also Instructs

BIRMINGHAM, AL - DECEMBER 12: Voters head in to cast their ballot as the doors open at a polling station setup in the St Thomas Episcopal Church on December 12, 2017 in Birmingham, Alabama. Alabama voters are casting their ballot for either Republican Roy Moore or his Democratic challenger Doug Jones in a special election to decide who will replace Attorney General Jeff Sessions in the U.S. Senate. (Photo by Joe Raedle/Getty Images)

In an essay for Harper’sscholar and writer Imani Perry tells a textured story of Alabama that moves through time and critical places throughout the state like Mobile, Birmingham, Selma, and Uniontown. “Alabama changes,” writes Perry. The author, an Alabama native, mourns, yet finds the space for hope. She predicts what recent, local events—such as Doug Jones’ black voter-powered fall 2017 Senate victory, or the opening of the nation’s first lynching museum—could mean for the whole of America, if we pay attention.

If you drive from Mobile to Birmingham, you can take the interstate, 65, which would bring you through Montgomery, the capital, the home of Rosa Parks, the site of the bus boycott and Martin Luther King Jr.’s onetime church. Or you can take local Alabama roads. The roads less taken are instructive. On another route, about an hour west, is a little-known place called Uniontown. It is in the Black Belt of Alabama, a region of double meaning: named for rich soil and the poorest people, slaves and later the barely emancipated Black sharecroppers and convicts leased out to do the hellish work of clearing land. The Black Belt is drier than the rest of Alabama. Yet thick forests remain even this many years after the wreckage that was king cotton. There are legions of cypress, oak, and loblolly trees, purple blazing star flowers, and all sorts of animals, especially the massive bucks that hunters pridefully kill.

Nearly two centuries ago, statesmen carved Alabama out of Mississippi, and then pushed out the indigenous—Cherokee and Creek—at the edge of bayonets. In swarmed the slavers hungry for cotton wealth in the nineteenth century. And that sensibility, although with some labor, still breathes.

The Black towns in the Black Belt are now dumping grounds—of fantasies and waste. In random assortment through the woods there are abandoned cars rusted to the color of dried blood, and stacks of old unwanted papers. But worst is what comes from out of state. Matter of fact, our nation has turned Uniontown, Alabama, into one of its trash cans, burying it in the refuse of thirty-three states. “Landfill” is too clean a word for what they do. And that’s not all. As part of Uniontown’s sewage system, liquid waste is spewed into the air to land on the hard Alabama clay earth. The town is showered in shit.

Uniontown is 90 percent Black and nearly all poor. A fact of modern living is that the least valued carry the heaviest burden. They’ll die first, at least that’s what the wealthy are banking on. And the dead are killed once again. The graveyard of generations of Black Uniontown residents, since before the Civil War, stands right outside the landfill gates, where descendants worry about the graves being disturbed, despite the corporate promise to treat the departed with respect. It has become harder to honor them. And, in truth, we are all probably somewhat ashamed to face them.

Alabama’s tough earth is either black or red, like what is found in much of West Africa. In preparation for a lynching museum in Montgomery, helmed by the civil rights attorney Bryan Stevenson, jars of Alabama earth have been collected from the sites of lynchings all over the state. Lined up, they are a hauntingly beautiful array of colors, from jet black to rust and copper. The red clay soil of Alabama, a form of ultisol, is produced by intense weathering, season after season with no new soil. My grandmother’s grandmother, like many old-time Black Southern women, used to chew and swallow that dirt—a mineral-rich taste that strengthened weak blood. Change the joke, slip the yoke, then they find a new yoke. Propose strangulation by trash and shit when the ropes will no longer do, and everyone, even the holier-than-thou North, will pitch in with their leavings. That is what the nation does to my state.

Except for on the King holiday weekend in January. And then the ossified sculpture of Alabama is brought out, shiny, stoic, and noble, and broadcast nationally. It often takes the form of a symbolic ritual of civil rights memorialization in Selma, Uniontown’s neighbor, especially during election cycles. The candidates theatrically walk over the Edmund Pettus Bridge during a celebration called the Jubilee, in remembrance of the Selma-to-Montgomery march. But there are no weapons aimed at them, there is no Nina Simone singing “Mississippi Goddam.” There are self-congratulatory crowds announcing, “Look how far we have come,” and, holding on, gripping, are organizers trying to find a way to use the iconography, to reshape it as a weapon for freedom. Alabama organizers have literally never stopped fighting. But the nation’s eyes haven’t thawed enough to see it.

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The Urban Crisis of Affluence

Skyscrapers
Photo by Tim Clayton / Corbis via Getty Images

After three decades living in and around New York City, I, too, am leaving to make way for the only people the city is still welcoming: billionaires who don’t live here.

In Harper’s Magazine, Kevin Baker writes at length in “The Death of a Once Great City” about how the few who can afford to build and buy in New York don’t want to live here, either. In one affluent twenty-block corridor, “almost one apartment in three sits empty for at least ten months a year.” A couple of neighborhoods south, developers at an eighty-three-unit luxury condo were recently offering “to throw in two studio apartments and two parking spots for any buyer willing to shell out $48 million for the building’s 7,000-square foot penthouse.” That’s five empty things for the price of one empty thing, in case you’d like to park dozens of millions of dollars in an investment property that’s big enough to fit dozens of homeless families.

Drawing from Michael Greenberg’s incisive piece on the city’s housing emergency last summer in The New York Review of Books, Baker connects the dots between empty penthouses and empty storefronts, decrying how “all that our urban leaders, in New York and elsewhere, Democratic as well as Republican, have been able to come up with is one scheme after another to invite the rich in.”

As New York enters the third decade of the twenty-first century, it is in imminent danger of becoming something it has never been before: unremarkable. It is approaching a state where it is no longer a significant cultural entity but the world’s largest gated community, with a few cupcake shops here and there.

The new rich infesting the city are barely here. They keep a low profile, often for good reason, and rarely stick around. They manufacture nothing and run nothing, for the most part, but live off fortunes either made by or purloined from other people—sometimes from entire nations. The New Yorker noted in 2016 that there is now a huge swath of Midtown Manhattan, from Fifth Avenue to Park Avenue, from 49th Street to 70th Street, where almost one apartment in three sits empty for at least ten months a year. New York today is not at home. Instead, it has joined London and Hong Kong as one of the most desirable cities in the world for “land banking,” where wealthy individuals from all over the planet scoop up prime real estate to hold as an investment, a pied-à-terre, a bolt-hole, a strongbox.

A triplex at the forthcoming 220 Central Park South will reportedly be sold for $200 million, and a four-story apartment at the same address is priced to move at $250 million. These would be the largest home sales ever recorded anywhere in the United States.

Who spends this sort of money for an apartment? The buyers are listed as hedge fund managers, foreign and domestic; Russian oligarchs; Chinese apparel and airline magnates. And increasingly, to use a repeated Times term, a “mystery buyer,” often shielded by a limited liability company.

This is not the benevolent “gentrification” that Michael Bloomberg seemed to have had in mind but something more in the tradition of the king’s hunting preserves, from which local peasants were banned even if they were starving and the king was far away.

There are now so many of the supertalls gathered so closely together that they threaten to leave the lower sections of Central Park, the only true architectural marvel to be seen here, in shadow for much of the year. One simulation found that the shadows of the highest towers may knife a mile into the park on the winter solstice.

When the journalist Warren St. John protested against these towers that block the sun and literally leave children shivering in the park, he pointed out that the highest supertall apartments—when they are occupied at all—house maybe a few hundred people, as opposed to the 40 million individuals who use Central Park every year. But this seems to be the calculation on which New York now operates.

Even for those who can afford the new New York, it is unclear how much they actually like it or maintain any ability to shape it to their tastes. What is the point, after all, of paying a fortune to live in a city that is more and more like everywhere else?

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Tax-Free Storage Wars

Atossa Araxia Abrahamian | Longreads | May 2018 | 15 minutes (3,575 words)

On September 17, 2014, the art world’s upper crust convened in Luxembourg City to fête Le Freeport, a warehouse where the ultra-rich hoard paintings, cars, jewelry, wine, and other luxuries in duty-free comfort. Waiters in red uniforms dodged oversize bouquets of white lilies to pass around trays of champagne, and an orchestra played an overture written especially for the occasion before an audience that included the Grand Duke of Luxembourg and top executives at Deloitte.

That evening, two American businessmen mingled among the government ministers, gallerists, and local bigwigs. Kenneth Cayre, a wealthy real estate developer, and Tom Sapienza, an accountant who’d worked for years in art shipping and handling, were planning their own entrée into the fine art storage business. But instead of operating in the luxury tax haven of Luxembourg, they would open their storage facility in a place not known for its low taxes: New York City.  

This story is published in collaboration with Artsy Editorial. Artsy is a global platform for readers to learn about, discover, and purchase art.

The terms “free port,” “free trade zone,” and “foreign trade zone” are used interchangeably in the art world. They generally denote a place that’s free of customs duties and other taxes— but the extent of that freedom depends largely on the jurisdiction of the facility. That’s why most of these warehouses tend to be in existing tax havens, like Luxembourg or Switzerland.

In the United States, these areas are called Foreign Trade Zones, and they’ve existed under the protection of Customs and Border Patrol since the first opened on Staten Island in 1937. Today, they’re located in airports, in seaports, and on waterfronts, but also in warehouses and urban centers. They’re a big part of the U.S. business landscape: There were 263 of these zones in 2016, employing 420,000 people across the country, with hundreds of billions of dollars worth of merchandise, from car parts to pharmaceuticals, moving into and out of them. The zones typically take advantage of what’s known as an inverted tariff. When there are federal duties on the imports of raw materials, like steel, but not on the import of a finished product, like a tractor, it makes sense to bring the steel into the duty-free zone, manufacture the vehicle there, then formally import it without incurring the taxes.  

None of this applies to artwork, though, because there are no federal import duties on art. Nor are FTZs home to any art studios engaged in manufacturing. Until recently, there was only one American FTZ dedicated to art, and it was in Delaware, which from a tax perspective is as close to a Luxembourgish freeport as you can get in the continental United States, so the facility was not only free of customs duties, but also most local and state taxes.

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A few inside the Arcis art storage facility in Harlem. (Zoe Wetherall for Artsy)

What Delaware lacks is prestige and proximity to auction houses, museums, and galleries, so Cayre and Sapienza recognized potential in a New York competitor. “We saw the attention at the opening,” Sapienza recalled at a 2017 art business conference, “and we decided we’re coming to market with a 21st-century storage facility. Why not, as the icing on the cake, add a Foreign Trade Zone?”

Their facility, which opened in April 2018 on a proletarian Harlem block on West 146th Street, is called Arcis Art Storage. “Arcis” is Latin for “fortress” — a fitting name for what’s essentially a museum-quality bunker, currently insured to store up to $3 billion worth of goods. Like Luxembourg’s Le Freeport, which is armed to the teeth and admits next to no one, security is tight: Guests at Arcis must have their retinas scanned to go through the first door, then present their bare forearms for a vascular scan at a second door.

Instead of operating in the luxury tax haven of Luxembourg, Arcis would open their storage facility in a place not known for its low taxes: New York City.

Once inside, visitors to the building will be wedged — geographically, at least — between a historic black church and a daycare center. But as far as the U.S customs agents are concerned, once goods are imported into Arcis — whether they’re coming from Shanghai or the Upper East Side — they are no longer within U.S customs territory.

This was going to be Cayre and Sapienza’s edge over a crowded New York art storage market. But there was a reason no one else had done it yet: Even though customs duties don’t apply, New York State taxes do. This means a painting bought at Christie’s and stored uptown would not get preferential treatment when it came to sales and use tax over a painting going anywhere else. Arcis got the competitive, insular art storage world wondering exactly what its executives were selling.

***

Kenneth Cayre, 74, has had a varied and eccentric career. His associates at Arcis, as well as friends and former colleagues, describe him as a sharp, family-oriented hustler. (He declined to be interviewed for this article.) Cayre began his import-export career in 1959 as a teenager, operating a floating duty-free store with his two brothers, sailing back and forth from Miami to the Bahamas with cigarettes, alcohol, perfume, and watches to sell to passengers who wanted to avoid high import duties. Over the years, he helped a cousin run a textile factory in Puerto Rico; operated a pantyhose manufacturer called Kandy Mills, in Hialeah, Florida; and, inspired by the rhythms of the Miami Beach club scene, started a record label with his brothers called Salsoul.

In the early 1980s, the Cayre brothers started Good Times Entertainment, which distributed VHS copies of Jane Fonda exercise tapes, knockoff Disney movies, and other videos whose copyrights were in the public domain. An early encounter with Walmart founder Sam Walton led to a long-standing distribution deal, but the company was eventually sold to a private equity firm in 2003. The company filed for bankruptcy in 2005.

ZWetherall_Acris_051818_03

A client viewing room at Arcis. (Zoe Wetherall for Artsy)

Today, Cayre owns and manages property with his sons, Jack and Nathan, including a million-square-foot chain of self-storage warehouses in the New York tri-state area called Treasure Island. In 2014, real estate heavy Steven Guttman made a splashy transition from cheap self-storage to high-end warehousing with Uovo, which now has branches in Rockland County and Long Island City, Queens — home to a burgeoning gallery scene and the contemporary art museum MoMA PS1. During this time, the art market was growing fast: Between 2005 and 2015, annual sales doubled to reach $63.8 billion, and more contemporary art is being produced and sold every day. Nearly 80 percent of all artwork is in storage, according to one storage executive, and since new art is made every day, demand for storage facilities — at least in theory — will grow continuously.

In an application for property tax breaks from the city of New York, Cayre describes himself as “an artist at heart” and claims that after Superstorm Sandy ravaged the downtown gallery scene, he felt compelled to enter the art storage business. “Ken witnessed more and more galleries and Fine Art storage facilities vacating Manhattan for locations in New Jersey like Newark and Jersey City,” the application reads. A desire to clean up his image may have also provided motivation: In 2006, Cayre was accused by New Jersey con man-turned-FBI informant Solomon Dwek of having received stolen assets worth $2.2 million. Although he was never charged, Cayre was kicked off the board of a New Jersey medical marijuana foundation in the aftermath.

Guests at Arcis must have their retinas scanned to go through the first door, then present their bare forearms for a vascular scan at a second door.

In mid-2013, less than a year after the storm, Cayre spent $4.5 million on the Harlem parking lot where Arcis now stands and an adjacent property housing a childcare and eldercare center. Six months later, one of his sons ran into a real estate developer friend at a Super Bowl party, who offered to introduce the family to someone in the art storage business.

That someone turned out to be Tom Sapienza, now a 48-year-old dad of three from Long Island with dusty blond hair and the wholesome, slightly stiff demeanor of a Little League coach. An accountant by training, he’s a khakis-and-blazer kind of guy, which makes it hard to imagine him at a glitzy art opening in Luxembourg. But Sapienza had a Rolodex of potential clients at museums, galleries, and family offices — fruits of a decade working as a consultant and CFO at Crozier Fine Arts, one of the world’s biggest art storage firms. Sapienza’s tenure there ended on a sour note: According to legal documents, he was fired in 2012 and subsequently sued the company for allegedly denying him his share of equity. His ex-colleague, Simon Hornby, declined to comment on the termination and the lawsuit; Sapienza also declined to comment on the suit, which was settled in 2017.

Cayre and Sapienza hit it off, and before long, were en route to a castle in Maastricht for a business seminar designed to educate art world professionals about finance and to educate financiers about the art world. “It was to expose Ken to the new global art world,” Sapienza says. In the class, they heard a presentation by a business professor about Le Freeport and the business of Free Trade Zones for art. “We left with binders and binders of information,” says Sapienza. “He loved it.”

***

The first free ports were established in early modern Europe as way stations for goods like grain, coffee, or spices. Their extraterritorial status saved traders time and money, but since the contents of these warehouses were perishable, the facilities weren’t intended for long-term storage, let alone keeping valuables like paintings and sculptures. But as globalization made more and more types of business transnational, these facilities evolved too. Today, free ports are a crucial cog in the global art trade. Their contents are fiercely guarded, top secret, and largely tax-free. But which exact taxes they incur depends on their location.

“The term ‘free port’ really does mean something phenomenal in Europe and Asia,” says Jason Kleinman, a partner and art-tax-law expert at Herrick Feinstein LLP. Those free ports exempt buyers and sellers from VAT and income taxes, and because of their clear perks, they have courted art collectors for decades. “These locations confer great tax advantages to the people who use them to store or conduct business,” Kleinman says, adding that when sales take place within a foreign free port, sellers also save on shipping and handling costs. For speculators flipping Picassos, free ports specializing in art and luxury items offer an attractive deal.

American FTZs, by contrast, have more limited benefits and have historically served the automotive, electronics, and oil industries. The art world got one of its own in 2015, when Austrian art shipper Fritz Dietl opened the 36,000-square-foot Delaware Freeport. His art-centric outpost allows clients who buy pieces in New York or Miami to avoid state sales taxes if they ship their pieces directly there — but the saving is due to the tax breaks offered by the state, not because it’s a FTZ.

For speculators flipping Picassos, free ports specializing in art and luxury items offer an attractive deal.

That’s because while American FTZ rules do waive federal customs duties when they are applicable, they don’t eliminate state or city sales and use taxes; in that respect, FTZs are part of the state they’re in, but not part of the country. Federal law further stipulates that goods can’t be bought and sold within the zones, so under-the-radar handoffs aren’t possible either. And New York’s sales and use taxes on art are levied based on the location where the buyer gains possession of the item, whether it’s acquired at a domestic sale or at an auction abroad — so the most an FTZ could possibly do is defer that cost while the item is in storage.

In other words, if a $10 million painting ends up hanging on a billionaire’s wall in New York after passing through an FTZ, the FTZ alone will not save its owner from the state’s 8.875 percent tax on sales and use. It might be more convenient or indeed more prudent to store a painting bought in Manhattan just a few miles uptown from the auction house than in Delaware or Long Island, because moving art is risky, but an FTZ won’t save money. And in the event that a painting was bought in London and brought to New York, the most the FTZ would do is defer tax until the piece leaves the zone. Since artwork isn’t dutiable, there’s nothing to gain from avoiding customs. “I spent hours researching it,” Kleinman says, “and I concluded that Arcis is a tax-free zone in search of a tax.”

Nevertheless, a tax-free anything sounds good to a certain clientele, even if the actual benefits are limited (or, as Kleinman suggests, virtually nonexistent). “People toss the term around all the time,” Kleinman says. “It’s P.R.”

***

After the Maastricht seminar, Sapienza called a former Crozier colleague, Kevin Lay, who joined Arcis as director of operations in 2016. For Lay, a rakish former punk rocker who is more visibly artsy than Sapienza, art preservation is a matter of philosophical import. “Art storage is time travel,” he says. “When you look at a painting you’re standing where the painter stood, and as custodians of culture it’s up to us to return this in the same condition it came in.”

Now complete, the warehouse looks a bit like a steely blue iceberg: monolithic, windowless, and blank. There’s no obvious signage save for a large purple A, for Arcis, on the north face of the building, about 10 feet above a 16-feet-high and 40-feet-wide loading dock that opens onto 146th Street. “If your art doesn’t fit here, it won’t fit anywhere in the city,” says Sapienza. (The largest dock at Uovo’s New York City facility is 13 feet 7 inches high and 11 feet 10 inches wide.) A discreet black car entrance leading into the loading area and visible only from one-way mirror windows in the executives’ offices will accommodate the rich and wary.

ZWetherall_Acris_051818_02

Detail of the Arcis storage facility. (Zoe Wetherall for Artsy)

Inside, the newly painted facility smells disconcertingly like an Ikea stockroom and looks, at first glance, like an ordinary industrial warehouse: exposed beams, large metal columns, huge mechanical doors, and stark white walls. The ground floor is divided into viewing rooms with $1,000-a-bulb lighting, per the company,  and ceiling rigs for moving heavy sculptures. There’s also a loft-like space where artwork will be inventoried, and, on the higher levels, private storage units in different sizes, along with larger shared spaces.

Lay and Sapienza can — and do — talk for hours about the building’s technical specs. If a storm surge were to occur, a protective envelope of panels made of insulated metal panels between its inner and outer walls would help protect it from the elements. Its power supply is uninterruptible, with every function intentionally redundant in case a power source goes out. The generators have backups located on the roof, which run on natural gas; in theory, they will keep the building going until any emergency is over. The faint whir of the air-conditioning system, which filters the air three to six times an hour, is a constant presence; otherwise, it’s completely quiet. “They’re not taking any chances,” says Lawrence Bovich, a partner at Mechanical Technologies, LLC, one of the firms that installed part of Arcis’ HVAC system. “These guys are many folds more risk-averse than any museum might be.” Arcis would be a great place to hide during a natural disaster, or allergy season.

Cayre applied for and received $13 million in tax breaks on construction by promising the warehouse would bring six full-time and 10 part-time jobs to East Harlem.

Serious protection costs serious money. The price of storing a painting at Arcis can range from just a bit more than at your average self-storage facility to thousands of additional dollars a month depending on the size of the unit, whether there’s custom shelving, and where in the building it’s located, says Lay — but he won’t say by how much.

Cayre applied for and received $13 million in tax breaks on construction by promising the warehouse would bring six full-time and 10 part-time jobs to East Harlem and calculating that its benefit to the city, mainly in other taxes, would total $20 million. But employment at art storage facilities typically goes to aspiring artists who know how to handle, crate, and transport the art; even Arcis’s own filings note that the business will require “employees with specialized skills sets similar to those of a museum registrar.”

That could explain why an administrator at a community organization on the south side of the block called Street Corner Resources, which does job placement for young people as part of its larger mission of reducing gun violence, said on a recent afternoon that he’d heard nothing about Arcis, let alone the possibility of jobs there. Staff at neighboring bodegas, a barbershop, and a local diner were aware of the facility because they’d served chatty construction workers from the job site; none of them knew they would soon share a block with million-dollar paintings. At the senior center next door to Arcis, whose building Cayre’s company acquired, a coordinator said they’d received assurances from the newcomers that they would not be displaced.

Because FTZs are regulated by the federal customs agency, local elected officials don’t participate in the approval process. When asked how Arcis might affect this part of his district, City Councilman Bill Perkins grew aggressive, demanded more information, and directed questions to his predecessor, current State Assemblywoman Inez Dickens, who didn’t respond to requests for comment.

***

In April 2017, Arcis was a sponsor of the Art Business Conference, a glitzy annual networking event for the fine art world, at the Time Warner Center in Manhattan. “Kevin and I both keep getting calls from people pushed from locations in Manhattan,” Sapienza told the crowd during a panel about freeports. “People wanted us to commit space. We have a warehouse reservation binder, with clients signing up for the space.”

In the audience were Delaware Freeport founder Fritz Dietl and Crozier president Simon Hornby. Hornby says Crozier also consulted with advisors on the utility of an FTZ, and the benefits came up short. “Art is not a dutiable good. There are no duties on art in the U.S.,” he says. “So what’s the point of a FTZ for art if there’s no duty in the first place and it’s designed to suspend duty?”

Even Dietl says the free port part of the Delaware Freeport saves little money. But branding something as a free zone or free port sends a powerful — if empty — message to potential clients. “It absolutely works because it’s a term that’s so widespread in the art world,” he says.

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A freight elevator at Arcis. (Zoe Wetherall for Artsy)

Self-storage king–turned–fine art protector Steven Guttman says his team studied the possibility hard before they opened Uovo and found no significant benefits. “We did not take this lightly,” Guttman says. “We knew about this a long time ago and kept saying this makes no sense. I’ve been in the business for three years, and never heard a tenant request an FTZ.” He adds of Arcis, “They may be onto something just by confusing people.”

Sapienza declined to comment on tax hypotheticals, insisting that it’s the client’s responsibility to obtain appropriate counsel and follow the law. Kevin Lay insists there’s some tax value to the FTZ — though that depends on how you define “art.” “Antique furniture that’s a hundred years old can be imported duty-free, but if you have a lamp from 1921 that you bought in Paris at auction for $1 million, if you were to bring it here, you would avoid those duties,” he says. The idea is that the lamp could hang out in storage until duties weren’t due. Other valuables, like some jewelry, also carry duties. In those scenarios, an FTZ can also be useful to avoid or defer them.

Herrick’s Jason Kleinman, whose job it is to help collectors manage (or as he puts it, “control”) their U.S. tax bill, says Arcis “doesn’t change anything for me or present me with any tax-planning opportunities.” Some of his clients were curious about Arcis, he says, but none had serious plans to relocate their assets. “I’d suggest anyone look at Arcis and apply to it criteria you’d demand of any other facility,” he says.

In the end, the biggest draw might be to collectors looking to keep their art close to home, and eventually sell at a New York auction. If there’s one thing everyone can agree on, it’s that the less you move art, the better. And the tax-averse, art-collecting global elite? They’ll always have Luxembourg. 

***

Atossa Araxia Abrahamian is a journalist and the author of The Cosmopolites: The Coming of the Global Citizen.

***

Editors: Michelle Legro and Anna Louie Sussman
Photographer: Zoe Wetherall

Fact checker: Ethan Chiel
Copy editor: Jacob Gross

Special thanks to the editorial team at Artsy.

 

O, Small-bany! Part 1: Spring

Illustration by Senne Trip

Elisa Albert | Longreads | May 2018 | 17 minutes (4,229 words)

They poisoned the water in the lake again. It’s actually more of an enormous pond. They poison it a few times a year. I’m not listening to music, for a change. My battery’s at 10%, anyway, and I want to eavesdrop. Washington Park’s full of people. Just like the Seurat painting, minus the class status and pointillism.

There’s a black man fishing with his tiny son crouching beside him. The man’s biceps are impressively built and inked. The boy says, “Tell me when you see a fish.” There’s a middle-aged white couple with a contented aura, walking a mid-sized grey mutt. There’s a very petite brown woman in tight blue athleisure berating a man who is pushing a baby in a stroller. Not a status stroller. Athleisure woman is on this man about something. He hadn’t been on time to pick her up. He is playing it cool (“Well, I came, didn’t I?”) but she is unrelenting (“Not when you said you would! Not til after you…”) and then they are out of earshot. There’s a young white mother from the nearby cult (I’m sorry: Intentional Community), holding a toddler’s hand. The Intentional Community manufactures the kind of old-fashioned wooden toys for which my bored mom friends and I go wild. They live and work in a huge brick mansion near the park. There’s free literature about their intentionality to be had in a little kiosk at the entrance to their driveway. Books about making peace with death and living in accordance with the laws of nature. When I was a new mother, I used to loiter around that kiosk. Should I join? They wear homemade clothing and raise children communally. I yearn deeply for the latter but I have a quasi-sexual weakness for fashion, and ultimately I’m not much of a joiner. The young mother in her homemade ankle-length skirt and bonnet is talking to a black man on a bench by the boathouse. He rests one arm on yet another stroller (not status), in which sits a toddler with a delightful head of tight, ombre ringlets. The man reaches out his hand to me.

“Hello!” he says, like we know each other; I don’t think we know each other.

“How are you?” he wonders.

I smile, nod: fine, fine, thank you, and you? I do this intuitive sort of bow, and continue on my way. The cult woman slightly glares at me from under her bonnet. Her glare (real? imagined?) trips some anxiety about running into people I’m not fond of, by which I mean people not fond of me. There’s this one woman in particular, your standard bad-vibes-in-small-town situation, and my nervous system goes insane every goddamn time.

***

Officially Albany is a city of a hundred thousand, but it feels like a very small town. Which can make it hard to take a walk sometimes. Small-bany, some call it. Shmalbany, I prefer. Albanality, a friend of mine says, but the syllables don’t work out. There’s not that fantastically freeing anonymity of your big exciting status places. State capitals are often kind of weird places. It’s a small goddamn town. So much chit-chat always waiting to be had. Just around that bend? Just over this hill? Just past that tree? I arrange my face in a blank mask and bland smile, practicing. I catch myself doing so, catch my thoughts circling this dumb anxiety; shake it off. You are safe, I tell myself. My whole goddamn sympathetic nervous system gets caught up in small town anxiety. It’s hard trying to be friends with everyone all the time. It’s okay if not everybody likes you. I used to kind of seek out people with bad energy, try to make them like me, but that only makes them like you less. I learn slowly.

You are safe, I tell myself, and it works. I am safe. Relatively speaking. More often now I seek to avoid or minimize encounters with people who don’t like me, people who bring out the ugly. This is progress, according to the meditation teacher.

Isn’t this the kind of inner drama we all share? Useless, banal. Best kept to oneself, only then how are we to take comfort in the knowledge that we’re all the same!?

Read more…

‘I Try Not to Have a Schedule’: Talking Writing with William Vollmann

Philippe Merle/AFP/GettyImages

William T. Vollmann is as renowned for the size of his books as the magnitude of his subjects: poverty, the morality of violence, the collision of Indigenous and European cultures. His book Rising Up and Rising Down spans seven-volumes and 3,300-pages. Imperial runs 1,306 pages. But his beautiful sentences, challenging structures, and documentary photography deserve equal attention, and his ten published novels and four story collections often require as much research as his nonfiction.

His newest project is a two-volume series called the “Climate Ideologies” that addresses how the wonders and waste of energy consumption are irrevocably heating our planet. The first volume, No Immediate Danger, covers the effects of manufacturing, farming and nuclear energy, and it took him into the restricted zone one mile from Japan’s ruined Fukushima Daiichi Nuclear Power Plant. Volume two, No Good Alternative, covers coal, oil, and natural gas.

Prolific, original and determined, on paper Vollmann cuts an intimidating figure. He famously wrote his first novel You Bright and Risen Angels at the San Francisco office where he worked as a computer programmer, often sleeping there a week at a time and living off of vending machine candy bars. In person, his warmth and humor make for easy conversation. Years ago, when I gave up on a big book project that was tormenting me, I did something crazy and wrote him a letter through his agent, telling him about my idea and struggles. Four months later, a handwritten letter arrived in my mailbox, encouraging me with wisdom that distilled his own approach to writing: read as much as you can about the subject, take the trip as many times as necessary to get it right, then the story will be yours. His words were just what I needed. I booked a flight soon after and wrote a whole book based on that reporting trip. Writers need mentors, and hungry readers need writers like Vollmann.

***

Aaron Gilbreath: You start No Immediate Danger by stating that it’s too late to stop climate change, so now we can only understand what led our species here so future generations know the details. Did your 2014 book Last Stories, about death, help prepare you for this grave work?

William Vollmann: Yeah. I had been preparing for the worst for a long time, but in Carbon Ideologies I do believe that it’s probably too late, but I’m hoping I’m wrong. Any book is really about its own present, even a science fiction book or a book like this, so it’s always possible that maybe some sort of a plant-based carbon sequestration system could come to our rescue. I’m not counting on it.

AG: I like that it’s dedicated to your daughter since that does add a small sense of hope that maybe salvation is possible.

WV: It would be nice, and if it isn’t then I’m just hoping that her life won’t be too much worse than mine and that there might be a few more generations yet before it peters out. You never know.

AG: One interesting thing about Carbon Ideologies is that it functions as an apology to future generations for the earth that we destroyed. The fact that you’re even hopeful enough to envision future readers makes me want to uses this interview to talk about writing in the same way, as a time capsule message to other writers both alive and unborn.

WV: Why not?

AG: You are one of the most productive writers on earth. A lot of my fellow writers know how hard it is to research, report and write a single-story, so we always wonder how you sustain your pace, publishing so many books at this size nearly every year. People like me picture you sort of living at your computer from morning until night. They wonder if you sleep. What are your writing days like?

WV: Well, I try not to have a schedule. So, I’m pretty much writing every day at some point, but I do other things also. When I get bogged down, there is something that I don’t understand, I set that aside and do something else, whether it’s another writing project or doing a little maintenance at my studio or painting or going on some river adventure to see my outlaw friends in the Delta. I just try to mix it up. So I very rarely feel any boredom, unless of course, I’m on my stationary exercise bike. After about 10 or 11 hours of misery, I get off and realize it’s been about 30 seconds.

AG: That sounds like my gym experience. Is that bike in your studio where you can toggle between it and your computer?

WV: It’s at the home, yeah and maybe I should get one at the studio too, I don’t know. But it’s also so hateful that it might be better just to swell up and die of diabetes or something. We will see.

AG: Did somebody convince you to get a bike, or was that your own decision to start that?

WV: It was my own decision. I have had that bike for 20 years, and once in a great while I will force myself to use it.

AG: The older I get, the more I wonder how exercise fits into the daily routine of somebody with a sedentary profession that involves so much reading and writing. Do you take preventative measures? Are there measures you wish you had taken now that you’re 58?

WV: There was an old guy one time who said, “Bill, in your 50s you start having problems. In your 60s you realize that you have to do something about those problems, and in your 70s you realize that those solutions don’t work.” So, you might as well just have a sense of humor about it and know that it has to end badly one way or another so, why worry?

AG: Smoke a cigar and have a drink.

WV: Exactly.

AG: It surprises me that you don’t have a schedule. Is part of your productivity related to successful multitasking and time management?

WV: I guess so, and also the fact that I don’t want to feel forced to do this or forced to do that. Sometimes I have to for a while, but mostly, if I really don’t want to be working on one particular thing at that particular time I don’t have to do it. That keeps me feeling fresh and gives me the sense of novelty, because once that’s gone you are thinking, Well, why on earth am I doing this? How can you write something interesting if it’s just drudgery?

When I’m researching a book, there is some necessary drudgery, so if I’m working on one of the Seven Dreams books, I try to get up to speed on the anthropology or archeology of those people whom I’m writing about. With Carbon Ideologies, there were a lot of tables I had to put together. At first, that was a rather dreary experience. Then I began getting quite interested. Whether or not the reader will ever be interested, I can’t say. But, once I had those tables, I felt that I was able to start saying things about what the tables implied. So that’s just how I do it.

AG: Making sure that it retains enough freshness to drive your interest?

WV: Yeah, I would say. How about you when you are writing, what do you do?

AG: Sort of the same thing. Since most of the time nobody is paying me ─ I write so many essays on spec ─ that I only write because it’s interesting and not drudgery. I operate almost entirely out of curiosity. I want to know or process my own experience or learn about the world, so I write because those subjects are fresh.

WV: That makes sense to me. If I try not to put limits on the curiosity, then I’m more likely to actually learn something. In Riding Toward Everywhere I talked a little bit about this one thing Thoreau said that I have always found inspirational. It runs something like, “We must not let our knowledge get in the way of what’s far more important, which is our ignorance.” So as long as I keep saying, “Alright, I’m ignorant. I’m ignorant about everything, and I want to learn more,” then I’m more likely to actually learn more, as opposed to saying, “Okay, now I know the answers about climate change.” People knew the answers about climate change a long time ago, and they were wrong.

AG: I saw that you mentioned that in the book that people had suspicions in, was it 1945 or the ’50s?

WV: By the ’70s people really started wondering. At Oak Ridge they were saying, “Well, things probably won’t be too bad until we get up to 400 parts per million of C02, but why worry, because that won’t happen until the 21st century.” So it’s an odd thing thinking about our obligation to the future. We never really had to do that. We probably should have done that, but we never actually considered the possibility that we might be making the future unlivable. Then suddenly here we are forced to decide, “Well, is that our responsibility? Do we want to do something about it?” I hope the answer is yes.

AG: In No Immediate Danger you distilled that sort of frivolity with the phrase “Keeping the lights on.” That seems to summarize the sense of convenience and thoughtlessness. Flicking the lights on and leaving them on, we don’t even think about energy’s effects or waste.

WV: There is something very beautiful in the idea that we have all this electric power at our disposal to make our lives better, and of course, in many ways, it has improved our lives, and will probably continue to do so. One of the real troubling things is that what we’re doing is not entirely frivolous. The fact that someone can do all the cooking and cleaning in the kitchen in less time than they used to. That’s really great. But what about all the so-called vampire power? All the lights on, computers and surge protectors just to keep telling you, “Yes, everything’s good, I’m still drawing current.” There are so many things that we don’t need, and one very dangerous aspect of our economic system is that there’s this notion that one has to keep creating demand. That means we will need more and more power, and no matter how efficiently we use it, if our absolute demand is increasing, most likely so will our greenhouse emissions. That is not very promising at all.

AG: Is that related to the sort of capitalist ideology of constant expansion? Edward Abbey said, “Growth for the sake of growth is the ideology of the cancer cell.”

WV: That’s right. It is a capitalist pattern, and it was also a socialist pattern. I talk at one point about the Russian’s idea that there have to be more consumer goods. They were doing it differently at a different scale, but what it really comes down to in my opinion is natural biology. A tree is going to try to grow taller and maybe crowd out the competition. A rabbit is gonna have lots of bunnies if it can, and we humans are going to want to have more and more. We want to reproduce and make our lives more comfortable and interesting, and in a sense that’s the natural thing that every organism does. Of course, the problem is that there are not unbounded limits. There are bounded limits, so unless organisms are checked by some means, organisms that obey their natural proclivities will get into trouble. I can’t even really blame capitalism as much as I would like to.

AG: In a sense, it’s a very judicious way of viewing our perilous climate situation. You do an impressive job in No Immediate Danger of not being judgmental of the culprits and instead simply look at why we do what we do, and assess what we have done. Are you are saying we are the victims of our own biology, even if we don’t recognize it or not?

WV: We’ve been very successful. I love being able to plug my laptop into the wall; I’m able to write more books. I love being able to get on a plane and fly to other countries. Probably the single best thing that you or I could do would be to give up air travel. I mean, there are lots of other things we could do. I’m still flying. I want to advance my career. I want to write a book. I want to see this or that, so I’m part of the problem. How can I blame capitalism for that?

AG: You implicate yourself right before the table of contents. You admit that you’ve consumed all these forms of energy and say, “Better an honest muddler than a carbon-powered hypocrite.”

WV: That is right.

AG: I grew up as an environmentalist, so I always felt very conflicted about procreation because of the amount of waste generated with plastic diapers and trash bags and all sorts of things. Once I met the right person, I wanted to have a kid. Then I met my daughter and just thought, To hell with it, this is the right thing to do.

WV: In a way that’s the so-called tragedy of the commons. Are you familiar with that paradigm?

AG: Yes.

WV: So, we all want to do what’s best for us, and we each take a tiny share of the net detriment to everyone that our choice has caused, so we’re still ahead by getting most of the net benefit.

AG: There’s obviously a moral imperative, but in our very individualistic society, is it possible for us to accept that moral imperative that comes with being a part of the commons in order to make any lasting changes?

WV: I am guessing that you and I as individuals can’t really do very much. We can reach out to other individuals and maybe, if I were lucky and many people read my book, and they all decided, for instance, not to fly anymore. That would make some difference, but my suspicion is that it wouldn’t make enough difference. What we really need are top-down regulatory changes. Why is it that in Japan it takes a lot less coke to make coal than it does in the US? Why shouldn’t we say, “Alright, if we’re going to make steel from coke then we have to at least use the Japanese technology?” And maybe somebody has to decide when we really need to use aluminum and cement and these other so-called big five materials that use 80% of all the energy for manufacturing. Of course, the more of this regulatory or bureaucratic burden you impose, the more we become something like East Germany. It will get less and less pleasant. But it may well be that we are approaching a state of emergency and won’t have any choice. It’s certainly true that the sooner we start figuring out how to reduce demand, the easier it’s gonna be.

AG: The regulatory experiment that Mayor Bloomberg did with the size of sodas in New York was an interesting way of changing people’s perception of what’s required to quench their thirst and what actually qualifies as a “large size.” It seems you’re right: the only way to make these large-scale, long-term societal changes will be top-down regulatory in that same generational way.

WV: I think that’s right, and I think that we are going to have people making cost-benefit analyses of various things. For instance, it takes almost a hundred times more energy to manufacture a pound of aluminum than a pound of cement, which is the lowest energy user of the big five materials. But aluminum, by being so strong, light and recyclable, makes a lot of sense in skyscrapers and bridges, and it may actually be more energy efficient to use that aluminum than to use the vastly heavier, greater quantity of steel that you would need to use. So who is going to figure that out? You want someone who is intelligent, practical and doesn’t have some kind of a bias, someone who is not a show for the aluminum industry or the steel industry. Where are we going to find people like that? I don’t know where to look. Those are the kinds of things that really make me very disheartened about the dilemma we’re in.

AG: It might be easier to create a colony on Mars than to find an unbiased politician who isn’t influenced by industry lobbyists.

WV: Yeah, a colony on Mars would probably be a fantastic boondoggle, and a lot of people could probably get rich supplying and exploiting it.

AG: If we are going to keep creating demand, why not do it on another planet?

WV: That’s right. First, we need to create some Martians that we can sell to.

AG: I did enjoy your comments in previous interviews about the potentially positive effects of swine flu.

WV: It’s all rather bleak. And that would certainly be an effective way to reduce demand, but I would rather we reduce demand in some voluntary and kinder way.

AG: A question for you about the origins of this book. A lot of us nonfiction writers fret about how to come up with ideas: have we run out of ideas? Can we generate more? I remember you saying you came up with the idea for the Seven Dreams Series while researching Rainbow Stories, asking yourself what the continent looked like before all these parking lots. How do you generate ideas, and how did you come up with Carbon Ideologies?

WV: Well, I guess it was my visit to Fukushima in 2011. First, I saw the devastation created by the tsunami. Then I went into the areas that were already abandoned as a result of the nuclear disaster. The tsunami left very palpable effects, but when I first went into the town of Kawauchi, for instance, it seemed as if people might almost still be there. It was very eerie. There were blinds pulled down, a couple of places maybe an umbrella would have fallen down at the front doorway, some potted plants starting to die. Over the next few years, as I kept returning to those parts of Fukushima that hadn’t been reclaimed, they were looking worse and worse and more creepy. But still, the local people kept saying, “Well, I don’t even know what radiation is. I mean, I don’t itch from it, I can’t really see it. It’s invisible.” And I started thinking about how great a metaphor that is for the effects of all these fuels. After a while, you can see indirectly the effects of the radiation contamination by looking at these hideous abandoned places, but you can’t see the contamination directly. Then when you go to nonnuclear fuels, you start seeing certain affects ─ the mountaintop removal and various ugly sites of oil and coal in Bangladesh ─ but you can’t see the emissions. So it’s a more slowly unfolding version of the tsunami or of the radiation contamination. You kind of have to work yourself into understanding it or to feeling it. That’s how I started thinking about Carbon Ideologies.

AG: So you started with invisibility as a metaphor, then in No Immediate Danger‘s Japan sections, you use your dosimeter and scintillation counter to bring this invisible drama to life, both to measure it and to prove that it exists at all. And people in the no-go zones still don’t believe you!

WV: I really wish that I had a lot more money to throw at this problem. I would have liked very much to have had a FLIR camera ─ forward-looking infrared ─ so that in my book I could have pictures of carbon dioxide coming out of smokestacks or people’s mouths, or of methane rising from manure heaps. But I wasn’t able to make those emissions visible in that way. Those cameras cost something like $60,000.

AG: Well, if you were online you would have been able to do some sort of Kickstarter campaign.

WV: That’s right. If I were online I’m sure I could do all kinds of great things.

AG: And be monitored. What about doing that retroactively; has it ever been done before?

WV: Well, maybe you can do it.

AG: I would love to. I’d have to get some money together. But the fact that you work in multiple mediums for different projects and have a photo book to accompany Imperial, you’re obviously the ideal person.

WV: Well, it would really be fun to be able to do it, and it would be nice if they had cameras to show the radioisotope blooms. Maybe they do. Anyway, all we can do is do our best with our limited senses. One of the things that I liked about the pancake frisker, which was the real-time analog to the decimeter, was as one of my friends put it, it’s like an extra sense. It was really fascinating to frisk my daughter’s cat. I was frisking everything for a while, and then I would be a little bit unnerved if something was four or five times more radioactive than something else. Eventually, I realized that that’s all so trivial. You fly to the East Coast or you go out to the granitic rock of the Sierras, and things are 10 times higher or whatever. Then you go to Fukushima and you might find things up to 700 times higher.

AG: What about your health: In one great scene in Japan’s radioactive city of Ōkuma, the protective shoe covers and painter’s suits “manufactured with pride in the United States of America” ripped. Have you been tested for the effects of radiation lately?

WV: I doubt that you could really tell. If I got some kind of cancer maybe there would be a way to track it back to the cesium, or maybe not. We probably all have micro-particles of various isotopes from atmospheric testing and concentration in seafood or whatever, so if I get cancer, maybe I can just console myself that it was as a result of drinking a lot of whisky or playing around in the dark room.

AG: You have made your peace.

WV: I have, yes.

AG: If the idea for this book started with your first visit to Fukushima, how do your other books evolve?

WV: It sort of depends on the book, Aaron. With one of the Seven Dreams books, I know what the story is, or at least what I think the story is. It turned out that what I thought I knew about Pocahontas and Captain John Smith wasn’t exactly true, but still I knew the basic historical events were fixed and my job was not to write a new story but to interpret those events. With something like Carbon Ideologies, the events and their effects are still unfolding and, to some extent, in dispute. My job there would be to take a lot of notes, visit the people and places available to me, read a lot of books and just let my ignorance guide me and hopefully save me from too much prejudice as I started building up judgments about these things.

AG: In your fiction, how do you inhabit other people’s lives in those historical eras?

WV: Well, for the Seven Dreams it’s possible to go to a very particular place. In The Ice Shirt I was able to go to the ruins of Erik the Red’s farm in Iceland and I could stand there and think, Okay, this is not too dissimilar to the view that Erik himself had. So I’m looking out at the water, at the clouds and the birds and grass and flowers and the stones and thinking, How does this make me feel? Is there any way brings me closer to Erik? For him, these things would all have been more quotidian and yet still there must be some kind of a common human response to wet grass and gray sky. That’s one of the ways you can just kind of work yourself back into seeing and trying to feel what those people would have. Then you try to perform some of the acts that you know the historical characters would have. For The Dying Grass, I had a chance to fire a Springfield single-shot rifle of the kind that the US cavalry would probably had fired. So I could say, Okay, this is what it feels to hold something of this weight. This is how you load it and how quickly could a person do this? Not nearly as quickly if one had an AR-15. How steady can you hold it? How difficult is it? What’s it like and here comes this topple white smoke from the black powder out the barrel, and then I have to clean it afterwards; the barrel is quite fouled with this stuff. So I’m doing all of these things relative to one particular action that if I describe accurately, I’m describing something intrinsically true about those US Calvary men. That’s another way of getting into what they might have felt and seen, and that is so much of who you are or who you become I think and what you do.

AG: So research and travel are the essential elements that unite both genres for you. The structures of all your books vary widely, so do you just adjust your approach and the structure of a book according to each project?

WV: That’s right. I think it would be a drag for me and the reader if I were just following some formula for my books. As I get older my options narrow, and I imagine that my books will become a little bit more of a piece, and that’s probably already happening. But the extent that I can resist that and make every book new, I think that’s a win-win for the reader and for me.

AG: So far, mission accomplished. One of the things that I also love about your nonfiction is its dry sense of humor. One of countless examples in No Immediate Danger was, “Let us now celebrate the miraculous smog of Calabar!” What else can humor do besides add levity to certain dark subjects?

WV: Sometimes you can make a frightening or bitter point more effectively through humor. You can actually make it sting a little bit more, and you can also try to sparkle up the page a little bit. If there are a lot of things about agriculture, fertilizers and so forth, it’s really incumbent on me to try to give the reader some little reward every now and then for reading that.

AG: You embrace the exclamation point, which I also like. Is that contentious punctuation also a way to get people’s attention?

WV: Yeah, and often in Carbon Ideologies the exclamation point adds to the ironic pseudo-ingenuous nature of some absurd claim about how wonderfully healthy radiation is or whatever.

AG: No Immediate Danger isn’t a joke, but in the way you point out the flaws of our thinking and denial about nuclear energy and climate change, this 600-page book all seems sort of punctuated by a giant exclamation point.

WV: That’s right. In a way it is, of course, a joke, right? It’s just the joke is on us and we’re not gonna like it, but maybe the beetles that replace us will somehow be able to laugh with their antenna.

AG: That sounds like your first novel brought to life. The fact that you wanted a FLIR camera to document the carbon dioxide and methane and expand the range of your climate change inquiry to a second medium makes me think how you like room to explore your subjects sufficiently. From what I gather, though, there’s been a long-standing attempt by your publishers to get you to cut your books, including page limits in your contracts and lowering royalties for longer books. Can you tell me about your legendary resistance to heavy editing?

WV: What if someone were to tell you, “We think your daughter was born a little bit too tall, so would you mind chopping off her legs?” You might not have the most compliant reaction to that, right?

AG: No.

WV: My books are my children. They’re just like my daughter. She’s turning out the way she’s turning out and that’s just how it is, so people can like her or not, but I love my daughter and I’m not going to chop off her legs. [laughs]

AG: So editing is forced surgery. You try to let the story be what it is, and the people who publish the book have their financial and other concerns? What dictates this chopping of the legs?

WV: Well, wouldn’t it be perfect for editors and publishers and maybe reviewers if all books had to be the same length? They all had to be, let’s say, exactly 124 pages, and the extra 24 pages all have to be ads. I mean, wouldn’t that just be lovely? One of the many reasons that I love the internet is, of course, because that’s how things are there. You can watch something and there’s going to be some wiggly, giggly little ad in the corner the whole time, and also, let’s track your eye movements. How wonderful it all is. As soon as there is any attempt to control creativity for noncreative purposes, we start going down that miserable road. But as I always say, Aaron, the world doesn’t owe me a living, and a publisher could legitimately say, “Well, Bill, we just don’t think you are going to pencil out, so we don’t want to publish your book.” That’s like saying, “Well, your daughter really is too tall, so we don’t want her to date our son.” That’s okay, but how awful it would be if they said, “Your daughter is too tall, so we want to chop off her legs,” and I said, “Okay, I’ll do that.” What kind of a father would I be? What kind of an author would I be to go along with that bologna?

AG: So protecting your vision of your book seems to be first and foremost?

WV: That’s right. My strength and my weakness is that I don’t really care about the financial implications. I don’t care too much about whether a book is going to make its advance back, which means I’m not a good team player. I have to be very thrilled and grateful that Viking once again saw things my way and let me publish Carbon Ideologies at the length that I thought it needed to be. It certainly can’t be too good for Viking’s bottom-line, but I think that, like me, they’re worried about climate change. They worked so hard, it was a real thrill to have such dedicated colleagues. I worked really hard too, and we all did our best without cutting off anybody’s legs.

AG: You struck a few of those chords in the “Note to the Reader” at the beginning of No Immediate Danger. You meant for the two volumes to appear as one volume. Your endnotes and citations got cut. I interpreted the “Note” as an apology to readers that the book they hold isn’t the book you intended. There and in the acknowledgements in the back of the book, you weren’t shaming Viking, but you were like letting the reader in on this push and pull between both parties. What was your intent including those?

WV: The main reason is that I’m very grateful. This is to some extent a math/science book, and I’m not a mathematician or a scientist, so I’m doing my best. Even so, it’s a risk for me and a risk for the publisher. So I’m really, really thrilled that they tried to help me and everyone by publishing this. That’s the main thing. As far as the push and pull part is concerned, I think that’s kind of interesting, and it’s probably a good thing that readers who care can learn that I didn’t want to cut the source notes. I wish they could have been in the hard copy. This is the first time that that’s happened, and it was a compromise that I was willing to make because Viking had already done so much for me and this book. Thank God I don’t have to understand their financial imperative, and I guess that’s all I would say.

AG: You do your job and they do theirs, and it seems you are able to meet in the middle.

WV: That’s right.

AG: I just love that there is a couple of places at the beginning of the book where you say, you know, it will be okay to skip the primer section and start over 200 pages in. I just pictured your publisher shaking their head, like, “Bill, please, try harder to entice the reader!”

WV: [Laughs] Unfortunately, it is to some extent a dreary book about a dreary subject. Of all my books, it’s probably not the book that people are going to put a pick up and re-read for fun. It can’t be. Just having to decide Let’s see, do we want to talk about lignite’s emissions per pound or its emissions per energy produced when it’s burned? ─ all this kind of stuff. It’s important and needs to be discussed, but it’s not particularly fun.

AG: But you clearly tried to have fun. You titled one section “The Parable of Adipic Acid” and had some fun there despite the dreariness of the subject.

WV: I do my best. [Laughs]

AG: As informative as it is, there are some funny lines in there like, “What a treat to watch adipic acid combining with the hexamethylene diamine so that we could see a pallid syrup forming, settling out into something resembling melted cheddar cheese!”

WV: Aw, how delicious.

AG: I guess it’s a good example that there are different types of books for different kinds of experiences, and your oeuvre contains so many different sorts, including the kind that we probably aren’t going to read on the beach.

WV: No, maybe not. Unless, of course, rising sea levels turn your backyard into a beach.

AG: That’s what so many residents of Phoenix, Arizona where I grew up were banking on with California earthquakes. They didn’t understand geology. Speaking of which, I was just reading about California governor Jerry Brown retiring, who said he doesn’t believe in legacies. I was wondering if you as a writer believe in legacies.

WV: Well, I want my daughter to live as long and as happily as she can, and I feel the same about my books. If people find some value in them after I’m gone so that their lives are extended, that’s a concept that makes me happy. But it’s hard for me to believe that I’m going to know it, and therefore what’s the point of a legacy in the way. You find that you give someone a very nice tomb and what happens? The tomb gets robbed. That’s life and that’s death.

AG: It seems interesting to think that since you don’t know if there will be a legacy, you shouldn’t burden yourself with trying to create one. Is that liberating?

WV: That’s right, but that doesn’t let me off the hook. I want to make sure that I do the best job I can and try to make things ─ to the extent that that’s possible ─ somewhat timeless. I try not to get too bogged down in what is current in 2018, for instance. I’m hoping that in the future someone could pick up Carbon Ideologies and say, “Alright, here and there, this part seems a little bit antiquated now, a little bit superseded, but still I understand what Bill’s trying to do, and how he’s trying to compare the different fuels, and this was how many perks per million of C02 there were in his lifetime.” What I would like is for the book to still be useful or of interest or still something in its dated way.

AG: When it’s a paper copy or in your achieves at the Ohio State University, readers will be able to see your intent and data unchanged, unlike on the evolving internet.

WV: Unlike the internet, exactly.

AG: Can I ask you about your daughter? I’m curious what it was like raising a child as a writer who travels for work as much as you do.

WV: Well, I love her very much and it’s been a thrill to be in her life.

AG: Your father was a very encouraging, cool father, a business professor who frequently told you, “Bill, if it’s not easy, lucrative, or fun, don’t do it.”

WV: Yeah, he was great. That’s a good business plan. I recommend that to everybody, especially to people like you and me Aaron who are self-employed. There is certainly no reason to do something for nothing unless it’s going to be fun.

AG: Amen. My dad, who is Mr. Practical, had good advice in that same vein. He said, “When you find what you like, do the hell out of it and make sure you enjoy it.”

WV: I agree with that.

AG: Do you see some of your intellectual appetites and hunger for knowledge and experience in your daughter?

WV: I think so, yes.

AG: As a new father myself, I just wonder how working writers balance everything, that and I want to help encourage curiosity in my own daughter.

WV: The good news is that as parents we will inevitably fail, and therefore all we can do is fail with grace and let our children see that we are not perfect and they are not going to be perfect either. If we can help each other through the hard times and forgive the rest then we are probably doing our best.

Read an excerpt from William Vollman’s “No Immediate Danger”

The Strike: Chemicals, Cancer, and the Fight for Health Care

Ian Frisch| Longreads | April 2018 | 32 minutes (8,040 words)

When 59-year-old Jack Mack wandered from picket station to picket station to ask the Question, he tried as best he could to ease into the conversation. He didn’t want to scare anyone off. It was two months into the strike, and tensions were high. “You know, we handle some pretty nasty stuff in there,” he’d say. Or, if the guy was older: “C’mon, you’ve been here as long as I have! You know everyone!” Sometimes, if he already knew the person, he’d cut to the chase: “Wasn’t there a guy you worked with down there that was diagnosed with cancer a few years back? Did he make it through?” If they didn’t answer, staring instead at their steel-toed boots, Mack would lean in and say, “You know, I’m sure you heard, but I was diagnosed with cancer myself. Beat it, but — you know.” Then he’d turn toward the sprawling complex across the street — the site of the only job he’d ever had — and nod, adjusting the cap perched on his head. “Yup. Forty years.” He’d inhale deeply, nearly a sigh. “That’s a lot of hours around those chemicals.” He’d shake his head, unsure if he should blame himself or Momentive Performance Materials, the chemical plant in Waterford, New York, where he had dedicated so many years of his life.

Like Mack, many of the employees on the picket line had worked at Momentive for decades, and while they didn’t know for sure that working at the plant caused their cells to metastasize, the workers certainly knew of the inherent consequences that stemmed from handling carcinogenic chemicals on a day-to-day basis. That fear of a link is what troubled Mack and his cohort, and it’s why in November 2016, nearly 700 unionized workers at Momentive went on strike, protesting what they thought was an unfair contract — one that pushed for more expensive and restrictive health insurance for workers and the elimination of health care for retirees altogether, “many of whom,” according to leaflets handed out during the strike, “are suffering from job-related illnesses caused by exposure to dangerous chemicals.” For decades, the workers had mixed and churned chemicals in a variety of forms to produce an endless array of products, which included specialized goods such as F14 fluids and rubber stoppers on syringes along with items encountered on a day-to-day basis like exterior coatings for soft drink bottles and the rubber used to manufacture nipples for baby bottles.

Now, though, those same workers were walking out for the first time, and the union outfitted a defunct hot dog shack across from the plant into a headquarters. Nearly all of them had been picketing the plant’s nine entrances 24 hours a day, powering through snow squalls, huddling around burn barrels for warmth, trudging through slush puddles.

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Union strikers around a burn barrel outside Momentive’s Water Treatment Facility. (Jonno Rattman)

On the picket line, in rare close quarters with men who worked elsewhere in the massive plant, Mack learned his coworkers’ stories. He took a few minutes out of each day to ask strikers if they’d had cancer or knew anyone who did. Sometime after Christmas, Mack had started jotting down the names — current and retired, dead and alive.

He kept the handwritten list folded up in his jacket pocket, adding new sheets as he collected new stories: six pancreatic cancers, seven bladder cancers, nine brain cancers, 11 throat cancers, 18 prostate cancers — spine, skin, stomach, and more. While these are cancers that do afflict men of a certain age—according to the American Cancer Society, one in nine men will be diagnosed with prostate cancer—the diagnoses outpace certain national averages. Brain cancer afflicts .006 percent of adult males, far below the roughly 2 percent of the strikers with throat cancer whom Mack surveyed. By mid-January, he had 85 names. Many of these men had worked in the plant for more than 20 years, which meant they’d tallied up decades of exposure to dangerous chemicals. (Of the scores of men on Mack’s list, I’ve independently confirmed the cancer diagnoses of two dozen, through interviews with either the men themselves or, in the case of 11 who died, with family and friends.) Mack himself had long known coworkers with cancer. To him and other employees, it was almost commonplace to know a guy who had been diagnosed. “Three other electricians I worked with in waste treatment also have cancer,” he told me. “Long-term exposure — in some of these buildings, there’s no way you can avoid that.” Mack, an electrician who works on the machines that process the plant’s chemical waste was diagnosed with prostate cancer in 2014. His brother, who also works at the plant, was diagnosed with tongue cancer the next year. Their father, who worked at the plant for 36 years, died of cancer in 1994.

Mack’s oncologist, Dr. Kandasamy Perumal, who specializes in urology and has operated a practice in nearby Troy for 35 years, is no stranger to cases like his. “As time went on, more and more people came from that area with instances of malignancy, rather than Troy or Latham or other towns. My practice sees comparatively disproportionate numbers of tumors from people who live in Waterford and Mechanicville,” he said. “But do we know if they all worked at the plant? I don’t know for certain,” he added, explaining that his practice is not obligated to collect workplace information from patients. Momentive said that it was unaware of any chronic health problems among employees as a result of exposure to raw materials, and that their well-being is its highest priority. “The company takes all necessary actions to ensure strict adherence to all federal and state health guidelines,” said a Momentive spokesperson.

There were risks in taking on this kind of work, Mack knew. So did many of the men whose names were folded up in his pocket. But there had been some promise of security at Momentive, a belief that their jobs would take care of them — a good living, a secure retirement, health care. Today they’re not so sure. After the plant was acquired by a private equity firm in 2006, things took a dark turn. A decade of control by Wall Street brought pay cuts and a litany of increasingly rancorous labor disputes — culminating in the massive strike.

When I visited Momentive in January 2017, workers sat at the booths inside the hot dog shack wearing camouflage jackets, reading newspapers, drinking coffee, and eating hot dogs and stale pastries. One checked in picketers who, after nine weeks on the line, were eligible for unemployment. They were also paid $400 a week by the union. The 104-day walkout began November 2 and ended February 14, and during that time these men were constantly on edge, both about the security of their job but more importantly about the precariousness of the benefits they desperately relied upon. The men were on strike for many reasons, but high-quality, affordable health care was their main concern. It was what they needed most.

Bill Tullock, a 55-year-old senior advanced control operator, whose doctor had found a tumor in his throat during an endoscopy for acid reflux in 2015, maintains that he’d never have gotten the routine procedure that led to his cancer diagnosis without Momentive’s old health insurance. At the time, his annual deductible was $500; now it’s $3,500. Tullock doesn’t solely blame the plant for his cancer, but he’s adamant that were it not for the generous coverage, he’d never have known he was sick.

“I dodged a bullet,” Tullock said of his battle with cancer, which, thanks to the low deductible he paid courtesy of his previous health care coverage, was caught early. “With the new insurance, I am pretty confident I would’ve never had the endoscopy, and would’ve never known there was a tumor. Then it would’ve spread, and I wouldn’t have known.” Under the new contract, once he retires, he’s on his own. “I dedicated myself to this place,” he said during the strike in January, sitting in the basement of the hot dog shack, holding back tears. “I should have never started working here. And now they are trying to give us this shit insurance and just — what, ‘Go die?’” He rubbed his eyes with the palm of his hand. “Our health insurance is like the final firewall of personal protection,” he said. “It’s all we’ve got.”

Tullock

Bill Tullock was told by his doctor to get an endoscopy in 2015; it turned out he had a tumor in his stomach. Jack Mack sits down with his list of sick workers while on a break at union headquarters. (Jonno Rattman)

The men who’ve worked at the plant for decades and battled cancer — whether they think it’s from the chemicals they handled or not — now face a task familiar to millions, one from which they thought they had a reprieve: They must either sign up for the company’s onerous coverage or fend for themselves to get health insurance, with costs varying widely through the complicated, cumbersome public exchange overseen by the government — the precariousness of which is compounded by the Trump administration’s promise to gut the Affordable Care Act, leaving workers in an even more fretful state of uncertainty.

Like so many Americans, they’re threatened by a toxic triumvirate of lax chemical-safety regulations, costly health coverage, and growing pressures on Wall Street to perform — the latter of which has forced businesses to perform under expectations that set them up to fail, with employees taking the brunt of the downfall

The decade of private equity ownership had gradually worn down a generation of workers, stoking a divide between those who would be taken care of and those who would go without. “Sacrifices were made with the expectation that we would get adequate health care when we retired,” Mack said. “If you are going to work in environments like this, you are going to need affordable health care.” The strike marked dividing lines between worker and owner and financier, but it also revealed a rift so deep that it was often left unspoken: What do American workers owe to one another?

***

Waterford, New York, is one of a cluster of manufacturing towns situated north of Albany, where the Mohawk River joins the Hudson. It blossomed into a factory hub as early as the mid-1800s and was known for its paper mills. A reported stop on the Underground Railroad, it was even visited by Alexander Hamilton and Frederick Douglass. Drive into town from across the Hudson and you’re greeted by a memorial to Waterford’s veterans, including men who fought in the Revolutionary War. Keep driving north on Route 4, past the village center, and the Momentive complex flanks both sides of the road, sprawling across an 800-acre plot.

The town greeting in Waterford, New York.

The town greeting in Waterford, New York. (Jonno Rattman)

The chemical plant is one of Saratoga County’s largest employers. First built by General Electric in 1947, it anchors the region both economically and culturally. For decades, the plant with its hundreds of union jobs offered its primarily male workforce a stable, middle-class kind of prosperity, one where high school graduates could eventually earn a six-figure salary. There was a sense of local pride: The soles of the boots in which Neil Armstrong took his one small step were made of silicone rubber manufactured here. “If you’re from here, this is where you work,” said Vinny Anatriello, a third-generation employee. “And if you don’t work here, you work in the school where all the guys’ kids go to, or you work in the doctor’s office where the guy’s sick wife goes, or you work in the grocery store.”

It’s no secret to the workers that materials used in Momentive’s Waterford plant can be dangerous. It’s been this way for decades. The plant sources silicone ore and, through reactions with various chemicals, produces materials used in consumer products ranging from shampoo and medical equipment to caulking and car parts. Numerous longtime workers say that the current operations use dozens of toxic chemicals, among them benzene, lead, mercury, and hydrochloric acid. The waste it has produced over the years — over 11.4 million pounds in 2015 alone — has at times included more than three dozen toxic chemicals, 11 of which are carcinogens, according to the Environmental Protection Agency.

There used to be even more, workers say, decades ago when GE owned the plant. Numerous workers said that until the early 1980s, they cleaned their winter coats with pure trichlorethylene, now a known carcinogen, and used fiberglass and lead as fillers in chemical mixtures. For some processes, they weighed out raw lead by hand. “Back then we’d scoop it like it was salt,” said George LaMarche, 65, who retired in July 2017 after 44 years at the plant and whose doctor is closely monitoring his elevated prostate-specific antigen levels — potentially an early sign of prostate cancer. “We never wore any protection for that.” In a statement, a Momentive spokesperson said that the company provides all its employees with protective equipment, extensive training, and instructions in how to properly handle the materials they work with: “When employees act in accordance with the policies and procedures Momentive has in place, potential risks are mitigated.”

Millions of American workers are exposed to carcinogens, or possible carcinogens, according to the National Institute for Occupational Safety and Health, the division of the Centers for Disease Control and Prevention that researches and investigates workplace safety and health. In 2012 alone, upward of 45,000 diagnosed cases of cancer — and, since the agency is still investigating and uncovering potentially carcinogenic materials used by the American worker, perhaps twice that many — were caused by past workplace exposure. On average, nearly eight times as many people die each year of diseases acquired on the job as die from injuries sustained on the job.

He kept the handwritten list folded up in his jacket pocket, adding new sheets as he collected new stories: six pancreatic cancers, seven bladder cancers, nine brain cancers, 11 throat cancers, 18 prostate cancers.

Since 1976, federal law has required all new industrial chemicals to be submitted for review by the Environmental Protection Agency. (Tens of thousands of industrial chemicals already in use were grandfathered in.) But after that initial environmental review, many industrial chemicals — which don’t necessarily have to get tested before being used in manufacturing — may never get a closer look by regulators. Once chemicals have entered the market, U.S. law only requires the EPA to collect data on the roughly 3,700 of them that are used at a rate of at least 500 tons per year. The data collected pertain mainly to their effects on the environment or the consumers of the products they produce — not on the workers who handle them.

“These chemicals are never sent back with actual information from the workplace,” said Jennifer Sass, a senior scientist with the Natural Resources Defense Council’s health program. “The regulations are focused on the end of the pipeline. But you can’t put the genie back in the bottle at that point. People are already affected.”

Updates to the Toxic Substances Control Act, which was amended by Congress in 2016, mandated more pre-market testing for new chemicals seeking federal approval and required the EPA to review already-approved chemicals in widespread use. Ten of the most toxic of those are slated to be tested in 2018, but it’s unclear whether that deadline will be met. (Two of the chemicals have been commonly used at Momentive.) Since then, however, President Donald Trump has promised to scale back regulations broadly and has targeted federal agencies, the EPA chief among them, for sharp funding cuts.

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Momentive Performance Materials, a chemical plant in Waterford, New York (Jonno Rattman)

In May 2017, Nancy Beck, a former industry advocate and executive at the American Chemistry Council (of which Momentive is a member), was selected to become the deputy assistant administrator of the EPA unit tasked with implementing the updates to the toxic-chemicals law. Just two months earlier, she had gone before a Senate subcommittee as a then-executive at the ACC to push back against the review process. According to an investigation by Eric Lipton at The New York Times, the EPA has spearheaded “a broad initiative by the Trump administration to change the way the federal government evaluates health and environmental risks associated with hazardous chemicals, making it more aligned with the industry’s wishes.” This included reevaluating plans to ban certain uses of two chemicals that have caused dozens of deaths or severe health problems: methylene chloride and trichloroethylene, both of which have been used by Momentive employees.

Regardless of these policy reversals, tens of thousands of chemicals that have been in production for decades still need review. The Union of Concerned Scientists, an environmental-advocacy group, estimated in 2015 that it could take 50 years to reevaluate 1,000 of the most toxic chemicals on the market. “Most toxins have not been adequately studied, employees have no tools to act on their suspicions, the companies have a disincentive to learn the full truth about what its chemicals do in terms of health impact, and the government is underfunded and doesn’t have sufficient tools to fully investigate,” said Dr. Steven Markowitz, director of the Barry Commoner Center for Health and the Environment at Queens College. “It’s a recipe for making the health consequences of working with toxic chemicals invisible.”

***

Tim Larson is a tall, broad-shouldered man who wears a musty cap tossed on his head. When I met him during the strike, he carried a megaphone that he used to shout chants on the picket line. His face lit up when he screamed, and his eyes — which seemed to hang out of his skull — bulged even further from their sockets. I stood with Larson most nights while I was there — he held the late shift on the picket line — and he explained that the plant is a complex of various buildings, each housing in a different part of the production line. You’re either breaking down raw ore, reacting the rock with chemicals, mixing together intermediate materials, packing products, or organizing them for storage and shipment.

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Tim Larson steps off a bus before a protest in Momentive CEO Jack Boss’s neighborhood in Saratoga Springs. (Jonno Rattman)

Larson, a chemical operator, began working at Momentive in 1988 when he was 35 years old. He told me stories about the different parts of the plant, including Building 78. This area of the massive plant is home to the Waterford plant’s fluorosilicone manufacturing operations. There, a silicone base is reacted in roughly 100-gallon “dough” mixers at more than 240 degrees Fahrenheit to produce fluorosilicone gum for use in automobile gaskets and aerospace products. (The mixers are also used to produce “intermediates,” which are unfinished products that passed from building to building within the plant, and included different grades of polymers and fluids.) Long-term exposure to seven chemicals used in Building 78, according to Momentive material-safety data sheets, are suspected of or known to be reproductive toxins. Another chemical, Tris(2-chloroethyl) phosphite, is a carcinogen. Workers call the building the One-Nut Club, for reasons that to them seem less ominous than inevitable.

When GE owned the plant, risks from fluorosilicone production had been on the company’s radar since the 1970s. In a “strictly private” 1977 safety audit, a safety specialist said that research had shown that materials created by these processes, when ingested — which could mean breathing in the chemical or having it touch one’s skin — shrank rats’ prostates and testes “and may have similar effects in man.” The specialist also wrote that tests showed that the chemical compound handled by workers was “probably not a carcinogen.” GE performed a similar toxicity review 20 years after its initial testing and analyzed several chemicals used to the produce fluorosilicones. “The data, although not definitive, did not give rise to any concerns over the potential for carcinogenicity,” the report concluded.

“Nobody admits there is a correlation, but we put stickers on the tanks that hold this stuff, saying that it causes cancer,” Larson told me, referring to the warning stickers that California state law required them to affix. (Many of their products are shipped to the Golden State.) “It’s right there in front of you.” 

“After six years, my eyes started bulging out of my head,” he told me, pointing to his face. He was diagnosed in early 1996 with Graves’ disease, an autoimmune disorder that affects the thyroid. “I had to get my eyelids sliced, because I couldn’t close my eyes,” Larson said. He knows he can’t prove a direct link, he added, but he is “convinced that all my autoimmune problems are directly related to working here.” Soon after his diagnosis, Larson transferred to another area of the plant.

The men were on strike for many reasons, but high-quality, affordable health care was their main concern. It was what they needed most.

Other workers voiced their concerns about Building 78. In 1998, a GE-employed research chemist named Herman Krabbenhoft wrote a letter to two operators who worked there, Joe DeVito and Dan Patregnani, explaining that the previous year he had expressed concerns to managers about the vapors released during fluorosilicone operations. Krabbenhoft wrote that GE’s health and safety manager was supposed to have initiated a study of how to measure the vapors’ concentration, but that after a year nothing had been done, adding that he was told by a colleague to “back off on pushing this because it might affect how GE’s managers viewed me and my performance.”

“Herman was on our side,” DeVito said.“He said, ‘Stay away from it. It’s going to kill you.’” Shortly thereafter, DeVito said, Krabbenhoft was fired. (Multiple attempts to reach Krabbenhoft for comment were unsuccessful; GE declined to comment for this article, referring all questions to the plant’s current ownership, who also declined to comment on the specific incident.)

The building’s ventilation system was updated in the early 2000s, multiple employees who worked there said. The system was supposed to be air and temperature controlled. “It never worked, never sealed the room properly,” said John Ryan, who worked in Building 78 at the time, adding that temperatures could reach 110 degrees in the building due to the faulty system. In 2005, Ryan said he filed a formal grievance, asking to spend less time near the mixer, explaining that he didn’t want to be exposed to the hazardous mixture and its vapors. “But nothing changed,” he said. “And they never fixed the dough mixer either. Materials would come out into the air or spill onto the ground. That’s still going on, until this day.” In mid-2017, Momentive installed a second dough mixer to Building 78 to ramp up production, and though the machine suffered at first from issues relating to its packing seal, there haven’t been any recent health-related complaints. (Both the venting system and the initial dough mixer have also been serviced and are reportedly in working condition.)

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Joe DeVito was diagnosed with throat cancer in 2013. He worked in Building 78. (Jonno Rattman)

Now, DeVito said, workers must wear full-face respirators when they clean the mixers, which have to be pristine before the machine can be used to produce another product. The fluorosilicone is so sticky, Larson claimed, that he used to have to climb into the 100-gallon drum and scrape off any lingering substance with a razor blade. “Fluorosilicone is a highly resistant chemical — oil, water, you name it,” he said. “That’s why it is used on gaskets and car bumpers, or in rocket ships.” According to DeVito, “Momentive took more steps for safety over the years,” but the process itself and the chemicals used in it remained the same. Additionally, the company’s material-safety data sheets do not indicate whether the vapors produced from these chemicals are hazardous to humans, despite there being a warning that TFPA vapors, which are highly toxic, may evolve from the products used to make fluorosilicone gums and polymers. “The company raised certain health issues related to the chemicals used in this building, but despite a very incomplete knowledge base, they draw the conclusion that there is no cause for concern,” said Dr. Markowitz of Queens College, who reviewed the documents. “My conclusion would’ve been: ‘There’s a big gap in what we know versus what we don’t know.’ That’s the proper conclusion.”

DeVito was diagnosed with stage 4 throat cancer in 2013, after a bump on his neck swelled to the size of a golf ball. DeVito told me he knows of five other control operators who worked in Building 78 who were diagnosed with cancer. He told his doctor about his decades of exposure to fluorosilicone vapors. “She said, ‘It would take years to prove that it happened from work,’” he explained. “‘Take care of this and just move on.’” His treatment, radiation, and chemotherapy, were successful. He retired in early 2018.

Some workers, like Tony Pignatelli, who worked in the plant for 34 years, weren’t so lucky. Pignatelli was diagnosed with brain cancer in January 2000 and passed away three weeks later. “My dad knew the risks, but he did it because they took care of them with good pay and health care,” his daughter said. “But I can’t even begin to understand what those guys are going through down there now with this new contract.”

***

Employees accepted the risks associated with working in the plant, the backbone of their community, for over half a century. They felt taken care of: stable pay, a sizable pension, affordable and quality health care, good communication with management, camaraderie with fellow workers. But that all changed when GE sold its global silicone operation, with the Waterford plant as its centerpiece, to a Wall Street investment firm in 2006 in a leveraged buyout. “When it was GE, they treated you like family,” Jack Mack said. “After the sale, everything changed.”

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Matthew, Kenny and Vinny Annatriello—father, nephew, and son—on the picket line. (Jonno Rattman)

Apollo Global Management, a private equity firm that manages $249 billion in assets, bought a controlling stake for $3.8 billion, then saddled the corporation (which changed its name to Momentive Performance Materials in December 2006) with $3 billion in financing debt while it collected a $3.5 million that first year for “financial and strategic advisory services.”

Many employees didn’t understand the implications of the sale until 2009, when nearly 400 production workers received surprise pay cuts. Brian Cameron Jr., a 34-year-old second-generation employee, was making $27 an hour as a chemical operator. He had just bought a house in Waterford and a new Dodge Ram pickup the previous summer. “Everything was going good. I paid my bills,” he said. “I thought I was set for life.” Then his wages were slashed to $17 an hour. He eventually took a higher-paying position at the plant, but his debt piled up too fast. “I thought if I moved quickly, I would be able to save my life,” he said. “But it was too late.” He lost his house, gave back his truck, and moved into a coworker’s apartment.

The cuts meant that his coworker Ron Gardner, then 53, and his wife, Donna, could no longer afford the $1,300 monthly payments on their two-bedroom ranch home in Grangerville. “We were struggling,” he said. A few years later, in 2013, they abandoned it and moved into a trailer park in Saratoga Springs, just two miles from Momentive’s current CEO Jack Boss’s $950,000, 4,375-square-foot home. They took out personal loans to pay for a $23,000 double-wide, then used savings and loans from family members to pay for the roof and the lot’s rental fees. Unable to sell their ranch, they filed for bankruptcy and began paying off their new debts.

The local union contested the wage cuts, and 18 months later, in 2010, with their contract soon to expire, Momentive agreed to settle by issuing back pay — more than $50,000 before taxes for some workers — while making the wage cuts permanent going forward. Gardner, Cameron, and others who had lost their homes or been pushed into bankruptcy by the cuts couldn’t turn down the chance to repay their debts. “People were so broke from the wage cuts, they voted yes for that contract,” said local union president Dominick Patrignani, who has worked at the plant for over 30 years and was the chief bargainer during last year’s strike. “They were given no alternative.”

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Ron and Donna Gardner lost their home, then Ron developed esophageal cancer. Dominick Patrignani, president of the local union, is the chief bargainer for the 700 strikers. (Jonno Rattman)

But Momentive wasn’t done. In 2013, the company froze pensions for workers under 50 and those with less than 10 years of service. “Every contract, they slashed benefits and made it harder for me to do what my father did: provide for his family,” Cameron told me during the strike. All of this is par for the course for private equity firms like Apollo. According to a study led by Josh Lerner, professor of investment banking at Harvard Business School, private equity buyouts lead to sizable reductions in earnings per worker compared with traditional companies, as well as modestly greater job loss, with a comparative decline of 4 percent over a two-year period.

“If a private equity firm needs to goose their returns, they will take it out of worker’s compensation — wages, pensions, benefits, all of it,” said Eileen Appelbaum, a co-director at the Center for Economic and Policy Research and the co-author of Private Equity at Work: When Wall Street Manages Main Street. To her, private equity firms only care about one thing: profit. “The fastest and easiest and least controversial way, in their point of view, is to cut compensation. They make a dollar every time they take a dollar out of workers’ compensation,” she said. “Private equity controls management and the board of directors. They can fire anyone at any time. They sit at both sides of the table. There is no one looking out for the workers.”

In 2014, still under Apollo management, Momentive filed for Chapter 11 bankruptcy, trimming its debt obligations from $3.2 billion to $1.2 billion. This is also a familiar tactic for the firm. “It makes sense [Apollo did that] because you create money out of thin air,” said Tony Casey, professor of law at the University of Chicago, who studied the Momentive bankruptcy case. “Apollo is an aggressive investment firm,” he added. “They are not shy when it comes to using bankruptcy to their advantage.” The company announced a public offering three years after it emerged from bankruptcy, but the offering was postponed. When it did, Apollo owned the largest stake of shares.

Taking advantage of bankruptcy courts is also a preferred method of President Trump, who counts Apollo CEO Leon Black as a friend. And while Trump boasts about his dedication to the American worker, the company he keeps deliberately erodes the foundation upon which the middle class is built. In a 2011 interview with George Stephanopoulos on ABC News, Trump said: “If you look at our great businesspeople today — Carl Icahn, Henry Kravis, Leon Black of Apollo — all of them have done the same. They use and we use the laws of this country, the bankruptcy laws, because we’ll buy a company. We’ll have the company. We’ll throw it into a chapter. We’ll negotiate with the banks. We’ll make a fantastic deal. … You know, it’s like on The Apprentice. It’s not personal. It’s just business. OK?”

“Every contract, they slashed benefits and made it harder for me to do what my father did: provide for his family.”

During Momentive’s bankruptcy proceedings, GSO Capital Partners, the credit arm of Blackstone Group, one of America’s largest hedge funds — headed by Steve Schwarzman, who chaired President Trump’s defunct Strategic and Policy Forum — translated its bond investment in Momentive into public stocks, a 6.8 percent stake. (A spokesman for Blackstone said the firm sold its stake in Momentive on August 3, 2016 — the same day union workers voted to strike if a contract agreement could not be reached. The spokesman, however, could not provide documentation of the sale. The spokesman also confirmed that Blackstone senior adviser John Dionne is still on Momentive’s board of directors.)

In 2013, Blackstone had bought a 20 percent controlling stake in another longtime upstate New York employer, then-declining Eastman Kodak, which had already slashed retiree health care benefits and pensions (though the company did restore elements of its pension plan upon emerging from Chapter 11 bankruptcy in late 2013). When Carl Icahn, the recently ousted special adviser to the president on regulatory reform — whom Trump also counts as a close friend — came to Trump’s rescue and retained full control of his Taj Mahal casino through a bankruptcy proceeding, he shut down the operation rather than give the union employees better health benefits. Roughly 3,000 people lost their jobs. “It’s a classic take-the-money-and-run — Icahn takes hundreds of millions of dollars out of Atlantic City and then announces he is closing up shop,” Bob McDevitt, the president of the local union, said in a statement after the closing.

Others in Trump’s family and inner circle have deep ties with these Wall Street operators, whose business tactics, like those being implemented in Waterford, affect middle-class families. Blackstone has loaned Kushner Companies, the real estate empire of Jared Kushner, Trump’s son-in-law and senior adviser, more than $400 million for real estate deals since 2013. The firm is one of the company’s largest lenders. Two months ago, the New York Times reported that Joshua Harris, a founder of Apollo, met with Kushner several times in 2017, at one point even discussing a possible job opening in the White House; by November of last year, Apollo would lend $184 million to Kushner Companies. (While Kushner is no longer CEO of the real estate company and has sold a chunk of his stake, he still reportedly holds properties and other interests in Kushner Companies — those investments are worth upward of three-quarters of $1 billion.) Kushner Companies is also on the clock to pay the $1.2 billion mortgage debt for 666 Fifth Avenue, a 41-story albatross in Manhattan that the company purchased in 2006, which is due February 2019.

Jack Boss joined Momentive as an executive vice president in March 2014, one month before the company filed for Chapter 11 bankruptcy, and he officially became CEO that December. The union believes that Apollo brought in Boss specifically to weaken the union during the next contract negotiation, which was slated for 2016. “They planned this entire thing,” Dominick Patrignani, the local union president, told me. “They knew what they were doing.”

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Dan Patregnani, a union member who worked in Building 78, and the headquarters of Apollo Global Management at 9 West 57th Street in. New York City. (Jonno Rattman)

In mid-January 2017, workers rallied outside the midtown Manhattan headquarters of Apollo Global Management, the private equity firm that had bought their company more than a decade prior. About a month later, members of their parent union, the Communications Workers of America, also handed out leaflets near the White House as President Trump met with Schwarzman, whom he had named an economic adviser and head of the Strategic and Policy Forum during the early days of the strike. (The 16-member group would disband just months after this meeting.)

Jack Mack, the second-generation worker who compiled the list of employees with cancer, trekked down to New York City to participate in the demonstration outside Apollo HQ. He stood with dozens of other workers and supporters, and his hot breath crusted in the frigid air as he called out Leon Black by name. This was the first time I met Mack — the strike had just begun. As the event came to an end and the NYPD began to shuffle protesters off the street, I asked Mack what he planned to do next.

He looked me in the eye and said, “Go back up to the plant and stand out there until this whole thing comes to an end — until we get what we deserve.”

***

The labor negotiations broke down over the summer of 2016, and by August a strike seemed imminent. In early September, 85 percent of workers rejected an offer that would have forced current employees into more expensive health insurance plans and eliminated the much-beloved benefit for future retirees altogether. They officially went on strike November 2. Five days later they voted again, with the same result — they rejected the offer by a larger margin.

Ron Gardner retired on New Year’s Day 2015. He was 61. He’d already lost his home and moved into his trailer, and he’d spent much of the previous summer at Saratoga’s venerable racetrack, watching and sometimes betting on the races. “I won enough to keep going the entire season,” he said, seated at his dining room table, television game shows audible in the background. Soon after he retired, he changed his health insurance on Momentive’s recommendation, switching providers and opting for a plan that was cheaper from month to month but caused his deductible to rise from zero to $3,500. He wasn’t worried. “I had never been sick a day in my life,” he said. But shortly before he retired, right around Thanksgiving 2015, he began having trouble swallowing. “It scared me,” he recalled. “I couldn’t even swallow my own spit.” There was a nearly two-inch tumor in his esophagus: adenocarcinoma, a form of cancer.

Gardner had begun working at GE’s Schenectady plant in 1973 and transferred in 1988 to Waterford, where he held various positions over the years, including the production of chemical mixers for caulking After GE sold the plant in 2006, he worked for more than two years refining chemicals in Building 30, filtering out cloudy imperfections before transferring those same liquids into drums to be sold to consumers. “I often inhaled a lot of vapors,” he said.

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The water treatment facility at Momentive Performance Materials. (Jonno Rattman)

Gloves, Gardner said, weren’t required for the job. According to material-safety data sheets, gloves are required only if a risk assessment deems them necessary. “He would come home covered in this caulking shit, all over his clothes and his hands,” his wife, Donna, said. “It would be everywhere.”

He transferred five years later to wastewater treatment, where he ran presses that compacted hazardous waste into dry, disposable cakes the size of kitchen tables before dropping them into trailers for disposal. He had to clean up spilled waste by hand and scrape out the presses if the cakes didn’t fall properly. The plant, he added, didn’t require respiratory protection for that particular job. “I breathed that stuff in for three and a half years,” he said. By the time Gardner began his last job at Momentive, the white walls of the facility had long turned gray from the dust produced by the waste. “That’s where I think I got the cancer from.”

Starting in January 2016, Gardner began a six-week course of chemotherapy and a month of radiation, paying off the $3,500 deductible in installments. Despite the treatment’s apparent success, Gardner’s doctor pressed him to undergo an esophagectomy. The operation — which would remove part of his esophagus and reconstruct it with the upper portion of his stomach — would be risky, and one of his lungs would have to be temporarily deflated during the procedure. Gardner decided against it.

By October 27, 2016, his cancer had returned. He needed the surgery to survive. But now he was racing against two clocks: the cancer and the company. Labor negotiations had broken down months before; the strike would begin within a week, and his current insurance coverage would run out at the end of December. “Company-paid medical, dental, vision, and drug coverage will not extend for the duration of employee strike activity,” a letter to employees from Momentive said.

“I wrote all the numbers down, in case I didn’t make it through the surgery, so Donna could get my pension,” Gardner said. “I didn’t trust Momentive to call her and say she was entitled to it.” He called his lawyer and had his will updated. He went into surgery on November 29, and spent nearly two weeks in the hospital. “I wish I could’ve been out there on the picket line,” he said. “It was all such bad timing.”

Once home, Gardner was told by Momentive to sign himself and Donna up for new health insurance through Mercer, a private online benefits marketplace, where employees can choose from a variety of providers and plans. A 2014 Aon Hewitt survey found that despite accounting for only 5 percent of current plans, 33 percent of employers said they would begin offering insurance through private marketplaces in the next three to five years. In a 2016 report, Mike Gaal of Bloomberg BNA wrote that large employers pitch private exchanges to employees as a way for them to “buy down” to more appropriate levels of coverage. “While this may be true,” he wrote, “the reality is that the plan savings, in this example, are derived through shifting costs to employees through high deductible, copayments and out-of-pocket limits.”

“I wrote all the numbers down, in case I didn’t make it through the surgery, so Donna could get my pension,” Gardner said. “I didn’t trust Momentive to call her and say she was entitled to it.”

The Gardners’ 2017 deductible would drop to $600 each, but their monthly premium soared from $262 to $1,152 per month — a hike Momentive promised to offset for already-retired workers under 65 with a $400 monthly subsidy. He got his first subsidy check on January 27, 2017. As a retiree, Gardner was one of the lucky ones. The younger generation was battling a contract that offered them expensive insurance while they worked — and nothing when they were finished with their working lives.

***

As the strike wore on, it drew the attention of elected officials in the area. Twenty-one Albany County lawmakers wrote to Momentive chief executive Jack Boss that the proposed contract seemed “to greatly hurt retirees and take too many health care and retirement benefits away from active employees.” State comptroller Tom DiNapoli reached out to Apollo; he has New York’s state-employee pensions partially invested through the firm. “I urge you to encourage Momentive to work diligently towards an expeditious settlement of this dispute on terms that are fair to labor and management,” he wrote. On the picket line in Waterford, one popular sign slung around the necks of strikers called out Apollo’s chief executive by name: hedge fund billionaire leon black, tell momentive: don’t destroy good jobs.

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Union strikers hold a sign outside of Momentive CEO Jack Boss’s home near Saratoga Springs. (Jonno Rattman)

In early February 2017, likely facing pressure from the governor’s office and intense publicity around both the strike and Momentive’s high-profile shareholders, Boss contacted the union’s regional leadership, bypassing the local chapter, and offered to resume negotiations. Four days later, a tentative deal was reached. Governor Andrew Cuomo, in his first public statement on the strike, announced his support for the deal, calling it key to “investing in the [union’s] world-class workforce, restoring operations at the plant and keeping upstate New York moving forward.”

Under the proposed new contract, to be voted on February 13 and 14, Momentive would keep matching 401(k) contributions of workers whose pensions had previously been frozen and would pay each striking employee a $2,000 bonus upon returning to work. In exchange, the union would accept the proposed health care amendments for current workers — more expensive premiums and deductibles. The company, rather than provide health insurance to future retirees, agreed to give at least 100 veteran workers a $40,000 cash bonus upon retirement — around $23,000 after taxes — that would hopefully cover any medical expenses before workers were eligible for Medicare at age 65. Though this was a win for the union, the next round of negotiations, in 2019, could decide the future of whether retirees will continue benefitting from Momentive’s medical coverage. “We have the right to negotiate now, which we didn’t have before last year’s strike,” says Patrignani. “It was going to sunset, but it’s still a topic of bargaining for future contracts.”

“You either have a preexisting condition, or you have an underlying condition, or you have an undiagnosed condition because of the inherent risk of working in a chemical plant,” said Robert Hohn, a 55-year-old employee. “You would probably have to pay a high premium and a high deductible. Would $23,000 cover that if something went wrong?” Hohn’s wife has degenerative disc disease, which requires constant care, and chronic gastrointestinal inflammation. Under the new contract, Hohn would have to pay $74 per week for him and his wife, with a $3,500 deductible and an annual maximum payment of $7,000. (Most workers signed up for this plan, which is the cheaper of the two; the other option has a $12,000 out-of-pocket maximum for a family). “The health care is going to kill me,” he said the day of the vote. “With my wife’s condition, we will definitely be hitting the maximum every year.” When the new contract came up for a vote, he felt he had no choice but to vote no. (At the beginning of 2018, Hohn’s wife left the insurance plan; he now pays $36 per week and a deductible for himself of $1,750.)

But many other workers feared that if the contract didn’t pass, some would cross the picket line to return to work, giving up their representation and fracturing the union. “They are pitting us against one another and using that to their advantage,” one worker said as he waited in line to vote on the proposed contract. “People are scared, feeling forced to vote ‘yes,’ even though the contract isn’t much better than what we went on strike for.”

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A classified ad for temporary replacement chemical operators in the Saratogian newspaper on a table in the union’s break house.

This internal tension became more and more apparent as the strike wore on, endless weeks of picketing outside during the coldest part of the year for upstate New York. “When it comes to these guys losing their health care, I should give a fuck?” one Momentive worker, speaking on condition of anonymity, wondered aloud in January, before the new union contract was ratified. “Why should I care about you when you didn’t give a shit about me in the past?”

Like some other younger union workers at the plant, he was in the minority and had voted yes on the contract back in September, recalling the wage cuts and pension freezes of years past. To them, the older generation were on their way out; the younger workers needed this place to provide for their families for decades to come. They wanted a fair contract for everyone, but they didn’t want to ruin what they had already — a stable job — and were willing to sacrifice benefits in the process.

Apollo has shut down other manufacturing plants in the past, and that threat was real for workers on the picket line. Noranda Aluminum’s Missouri plant once employed over 800 union workers. Then it began a slow decline, and after Apollo sold its position in 2015, the plant shut down in early 2016. To some workers, a long and intense strike could make that possibility a reality. “To me, it’s not worth losing all of this. If they shut down, where will we go?” said another during the strike. “Stop whining and move forward. These old guys, they’ve had it so good for so long that they don’t want to give anything up. Sometimes, to me, it’s better to take one step back so I am able to still move forward — not like this situation now.”

The contract passed on February 14, 2017. The men went back to work within days. “They didn’t achieve everything they wanted,” said Bob Master, the union’s legislative director for the region. “But sometimes the fruits of victory don’t show up until later on, during the next round of negotiations, when the company remembers the spirit and determination of a united workforce.”

***

Robert Hohn and his coworkers are already anxious about what new concessions their next contract negotiation in 2019 might bring. Since the company’s sale to private equity a decade ago, men like Ron Gardner, who went into bankruptcy after leaving his home for a double-wide trailer and fought cancer from exposure at the plant, have watched as their Wall Street–backed corporation trimmed job benefits they’d counted on for decades — benefits all the more crucial now, as they face retirement tinged with the threat of cancer. This time around, it was health care for retirees. What will it be next time?

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Outside the entrance gate of the Momentive chemical plant. (Jonno Rattman)

Apollo, meanwhile, announced in July 2017 that the firm had raised $24.7 billion for its latest global buyout fund, the largest sum of leveraged-buyout capital ever raised by a private equity firm, poised to pave the way for many more acquisitions like the one that created Momentive. Up in Waterford, there are whispers that Apollo is even trying to force the landlord to sell the hot dog shack — which the union still uses as it’s headquarters — and its surrounding land rights.

But despite these big-picture moves by corporate financiers, workers at the plant are still focused on their benefits — assets that are crucial to their survival. “I still don’t trust Momentive,” Gardner told me. The company had already cut his pay. What, he wondered, would prevent it from eventually taking away the insurance subsidy he received each month? If he lost the subsidy before he got Medicare, he explained at his dining room table, he won’t be able to afford health insurance. “After that, I don’t know what would happen,” he added, looking out the window. It was starting to rain. “If the cancer came back and I didn’t have coverage, I would die.”

***

Ian Frisch is a journalist based in Brooklyn. He has written for The New Yorker, The New York Times, Bloomberg Businessweek, Wired, Playboy, and Vice, among others. His first book, on magic and the secret lives of the subculture’s most prominent young magicians, will be published in 2019 by Dey Street Books, an imprint of HarperCollins. 

Editor: Michelle Legro
Photographs: Jonno Rattman

Fact checker: Matthew Giles
Copy editor: Sean Cooper