Asarco, citing DOJ probe of EPA, wants settlement voided

WASHINGTON (Reuters) - An Arizona mining company has asked a federal court to void a $220 million settlement with the Environmental Protection Agency, saying it found the Justice Department was conducting an criminal investigation of the agency over the case.

Asarco, a unit of Grupo Mexico, has long accused the EPA of concealing records that would clear the company from claims it polluted thousands of properties with lead near Omaha, Nebraska, where it operated a smelter for more than 50 years. Asarco says that lead paint from houses caused the pollution, not the plant.

The company filed a motion this week in U.S. Bankruptcy Court for the Southern District of Texas asking the court to nullify the settlement, which was reached late in the last decade. The motion says the EPA's Robert Feild, who coordinated a project looking into the Nebraska sites, destroyed agency records and advised others to do so.

Asarco exited bankruptcy in 2009, four years after it sought bankruptcy protection.

The motion said Asarco learned this month that the U.S. Attorney's Office and the EPA's Inspector General are conducting a joint criminal investigation relating to potential obstruction of justice by Feild.

Asarco got the information about potential destruction of evidence from a Freedom of Information Act lawsuit, it said.

"We recently learned that Justice and the EPA Inspector General have been investigating EPA's misconduct since 2010 and we are cooperating fully," said Greg Evans, a lawyer for Asarco.

"We are confident the court will order EPA to return some or all of the $219.5 million Asarco paid," as part of a series of pollution settlements the company agreed to in the last decade, Evans said.

The EPA's Feild did not immediately return requests for comment, but his regional office said it would be "wholly inappropriate" for it to comment on the possible existence of any investigation by the U.S. Attorney's Office, or the EPA's Inspector General.

The EPA deferred to the Department of Justice and its Inspector General's Office did not return requests for comment. Wyn Hornbuckle, a spokesman for the DOJ, declined comment as the matter remains in litigation.

(Reporting By Timothy Gardner; Editing by Bob Burgdorfer)