Eastman Kodak to spin off Eastman Chemical Eastman Kodak will spin off its Eastman Chemical division, the 10th largest U.S. chemical producer, with $3.9 billion in sales. Eastman Chemical will become an independent company with its own listing on the New York Stock Exchange by the end of this year. The move, announced in New York last week, has long been anticipated within both the chemical and financial communities. The plan calls for Eastman Kodak to issue new shares of Eastman Chemical stock to shareholders in proportion to their current holdings, pending Internal Revenue Service approval of the distribution as tax free. Kodak will not hold any ownership in Eastman Chemical. The combined dividend of the two companies should equal the current Kodak dividend of $2.00 a share. The 53-year-old Eastman Chemical will set off on its independent course saddled with $2 billion in debt, its share of parent Kodak's current $7.2 billion in debt, largely incurred when it bought Sterling Winthrop in 1988 for $5.1 billion. Kay R. Whitmore, chairman of Kodak, says the $2 billion should not overly burden the new Eastman Chemical, which he predicts will still be able to achieve an investment-grade rating. However, the spin-off may adversely affect Kodak. Standard & Poor's, the New York-based credit rating agency, warned that Kodak's "credit quality could be weakened by the loss of the well-positioned and profitable chemicals unit and the diversification it brings to the Kodak business portfolio." Earnest W. Deavenport, group vice president of Eastman Chemical, and the man who will head the newly autonomous chemical operations, was clearly delighted with Eastman Chemical's prospects at last week's news conference. Eastman, he says, will be able to sharpen its focus on its core acetyls, polyesters, olefins, and organic synthesis businesses. It will have "more efficient access to capital markets," and will also be able to link its stock's performance to market value. With Eastman Chemical making up only 20% of Kodak's $20 billion in sales, in the past there has been little link between the company's stock price and the chemical subsidiary's performance, he notes.
Although full details of the separation still must be worked out, Whitmore says Eastman Chemical will continue to supply Kodak with photographic intermediates, but under license to Kodak, which will retain production patent rights. Davenport notes that Kodak is Eastman Chemical's most important customer, purchasing some $300 million to $350 million in materials (8 to 9% of sales) including not only specialties, but commodity products as well. He speculates that Kodak will soon "want to benchmark" for the commodities it now pur-
chases from Eastman Chemical against those of other suppliers once the two companies are separated. As for Kodak after the breakup, Whitmore told reporters the company intends to focus on its core photographic, copier, and health care businesses. He suggested that personnel cuts, particularly in Rochester, N.Y., and sales of some smaller assets are still under consideration at Kodak. No personnel cuts are anticipated at this time for Eastman Chemical. Marc Reisch
Clinton forms sustainable development council On June 14, the anniversary of the are not successful [in confronting enviEarth Summit in Brazil, President Bill ronmental issues], we simply are not Clinton created a new White House ad- going to exist." visory group called the President's By bringing together leaders from so Council on Sustainable Development. many sectors, Lash says, "we can change The council will strive to create policies the way national environmental policy is that encourage economic growth, job made—from confrontation to partnercreation, and, at the same time, envi- ship—from gridlock to progress." ronmental protection. The goal of the council is to develop In announcing the council, President a national strategy for sustainable deClinton said, "Every nation faces a velopment that can be implemented by challenge to identify and implement both public and private sectors. The policies that will meet the needs of the council will formulate part of the U.S. present without compromising the fu- plan that will be submitted to the Unitture. America will meet that challenge ed Nations Commission on Sustainable with the help of this council and the Development. The commission is the ideas and experience its members bring international body created at the Earth to this important task." Summit to oversee implementation of David T. Buzzelli, vice president and Agenda 21—the comprehensive intercorporate director of environment, national policy declaration that nations health and safety, and public affairs for agreed to at the summit. Dow Chemical, and Jonathan Lash, The council will divide into commitpresident of the World Resources Institute, an environmental think tank in Washington, D.C., were named cochairmen of the council. The council has 25 members who include five Cabinet secretaries, as well as industry officials, environmental activists, civil rights leaders, and academicians. The business community is eager to help shape "bold new environmental approaches that change the course of their companies," Buzzelli says. "We'll try to figure out how to get small, medium, and large businesses moving in the right direction," he adds. "If we Buzzelli (left) and Lash to cochair council JUNE 21,1993 C&EN 7
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tees to develop strategies in areas such as energy efficiency, pollution prevention, a reordering of U.S. agricultural policies, and environmental justice. It will sponsor projects to test the usefulness of its recommendations and establish links with nongovernmental organizations. Its first formal meeting will be held in September. Bette Hileman
NIHfraudinvestigator ends hunger strike Although the National Institutes of Health has not acceded to Walter W. Stewart's demand that he and his colleague Ned Feder be allowed to resume their work on scientific misconduct, Stewart has ended his hunger strike against the agency. Too much attention was being focused on him personally, Stewart tells C&EN, while the goal of his fast had been to gain attention for whistleblowers who are being denied justice. Stewart and Feder were notified in April that they were being reassigned to new jobs at the National Institute of Diabetes, Digestive & Kidney Diseases. For the past 10 years, they have concentrated on investigating and studying cases of scientific misconduct instead of performing laboratory research. Many scientists who believe they have been denied fair treatment have turned to Stewart and Feder for help. The pair were reassigned not long after historian Stephen Oates of the University of Massachusetts, Amherst, complained about their investigation of his alleged plagiarism. Stewart and Feder claim their scrutiny of Oates' writings was a legitimate test of the computer system they developed to detect plagiarism. But even many of their long-time supporters thought they had gone too far in investigating a nonscientist who receives no NIH funds. Stewart began his fast May 10 after NIH locked him and Feder out of their lab, denying them access to their files. NIH's parent agency, the Department of Health & Human Services, has refused to negotiate with Stewart or Feder, although it did initiate an on-going review of their reassignment. Stewart was weakening rapidly by the time he resumed eating on June 11. 8
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His decision to end his fast was prompted in part by evidence of growing support for him and Feder in Congress. Sen. David H. Pryor (D.-Ark.), for example, wrote HHS asking the department to review the issues, preferably before a conference on plagiarism sponsored by HHS's Office of Research Integrity begins this week. The conference includes a session on the role of computers, but Stewart and Feder have not been invited to participate. Ironically, Stewart and Feder have not received significant support from their one-time champion, Rep. John D. Dingell (D.-Mich.). Both men worked for a time with the staff of DingelTs House Energy & Commerce Committee's Subcommittee on Oversight & Investigation, most notably on the misconduct case involving Nobel Laureate David Baltimore and his coworker Theresa Imanishi-Kari. But the powerful Congressman has distanced himself from the pair in the latest controversy.
"First, it was not unreasonable for [NIH] to view the detailed investigation of Professor Oates by Mr. Stewart and Dr. Feder as beyond the mission of NIH scientists," Dingell wrote to Stewart's and Feder's lawyer on June 10. "Second, Mr. Stewart's hunger strike has injected an element of what even some of his supporters recognize as blackmail," Dingell continued. 'It is an overreaction because the scientific integrity issue is far larger than Mr. Stewart or, for that matter, me. It is counterproductive because it blocks progress on resolving the issue of how the federal government can best protect the public from scientific misconduct. And it reflects exceedingly poor judgment by Mr. Stewart." Stewart and Feder are continuing to take annual leave and refusing to report to their new assignments. "We'd like to settle the whole business and get back to work," Stewart says, referring, of course, to their work on scientific misconduct. Pamela Zurer
Russian chemists seek aid infightagainst state Russian chemist Lev Federov was in the U.S. last week seeking support from scientists and politicians for his embattled colleague, chemist Vil Mirzayanov. Writing in the English-language newspaper Moscow News last September, both scientists revealed a secret Soviet chemical weapons program that purportedly developed a binary weapon containing an agent much more deadly than VX nerve gas. They also claimed that the site of the research facility, in Moscow on the Volga River, is heavily polluted by mustard gas and nerve agents, and that this contamination has and will continue to affect the health of Moscovites. Through a translator, Federov tells C&EN that "this organophosphorus compound is 10 times more toxic than VX." It was produced, he says, "in a large enough amount—about several tons—to start the military experiments [field testing]." Such testing took place in early 1992, two years after the U.S. and the then-U.S.S.R. signed a bilateral agreement to destroy their stocks of chemical weapons. A month after reporting the development of this new binary weapon, Federov and Mirzayanov were arrested for divulging state secrets. Federov was not
detained because he had no access to official documents. Mirzayanov, however, was charged with betraying state secrets and was imprisoned by the Russian Federation Security Agency, the successor agency to the Soviet KGB. Mirzayanov worked at the State Union Scientific Research Institute for Organic Chemistry & Technology where the new weapon was developed. Mirzayanov was held at the infamous Lefortovo prison for 11 days, without access to a lawyer or his family. Now out of prison, he awaits trial, but no date has been scheduled. Because Mirzayanov cannot travel outside Russia, Federov has come to the U.S. to garner support from scientists and politicians. He has visited with National Academy of Sciences officials and with several Congressmen, asking them to write letters to President Boris Yeltsin beseeching him to prevent a trial from taking place. The American Chemical Society has already written a letter on Mirzayanov's behalf. Federov fears that if Mirzayanov stands trial, he will be imprisoned for an act that may not be illegal under the constitution of the new Russian Federation. Lois Ember
