More Companies Knew About Tainted Drywall but Stayed Quiet—and Kept Selling It
At least a half-dozen homebuilders, installers and environmental consultants knew as early as 2006 that foul smells were coming from drywall imported from China – but they didn’t share their early concerns with the public, even when homeowners began complaining about the drywall in 2008.
ProPublica and the Sarasota Herald-Tribune reported last month that two U.S. companies – WCI Communities, a major Florida homebuilder, and Banner Supply, a Miami-based distributor – knew about the problem in 2006. But according to recently released sworn depositions by current and former executives at Banner, other companies also were aware of the problem.
The U.S. Consumer Product Safety Commission has since linked the foul odor to sulfur gases that can corrode electrical wiring and household appliances, including air conditioners and refrigerators. The long-term health effects of the air are still being studied, although homeowners have complained of respiratory problems, bloody noses and severe headaches.
As WCI was ripping the smelly drywall out of homes on Florida’s east coast, the company was selling houses built with the same material on the west coast. Several homeowners in the Sun City Center and the Venetian Golf and River Club in North Venice told ProPublica and the Herald-Tribune that they bought homes from WCI as late as March 2007 — eight months after the builder had found problems with Chinese drywall — but received no warning.
When WCI filed for bankruptcy protection in 2008, it promised many homeowners it would fix the contaminated homes once it emerged from bankruptcy. The company exited Chapter 11 bankruptcy protection last September as a privately held company and recently announced plans to build new homes throughout Florida. Meanwhile, scores of its former customers are still living in WCI homes built with Chinese drywall.
Calls to WCI executives were routed to the company’s public affairs office, which did not respond to questions, including whether WCI still plans to repair the homes.
Banner and its attorneys didn’t respond to calls for this story either.
The president of one company mentioned in the depositions, PDC Drywall Contractors Inc., said in an interview with ProPublica and the Herald-Tribune that Banner delivered Chinese wallboard to PDC’s job sites in 2006 against PDC’s wishes.
The president, Peter Cuomo, said he had noticed that some of the drywall being imported from China crumbled more easily and couldn’t be cut as finely as American-made drywall. More important, it did not carry the usual markings and had no warranties — leaving installers at risk if there was a future problem, Cuomo said.
“I told Banner I didn’t want any of it,” Cuomo said. “I sent them a letter, and told them again. But they kept sending it to me, sneaking it in with the deliveries hoping we wouldn’t notice.”
Cuomo said he wasn’t aware of the odor problem in 2006, but the other issues were worrisome enough. When one of his workers called to tell him that Banner had delivered several sheets of the problematic board to a construction site, he said he had the drywall removed. He said he also contacted Gus Coffinas, then the head of Banner’s Port St. Lucie operation, to complain again.
Coffinas couldn’t be reached for comment.
“I told him we don’t want any Chinese board, what’s going on here?” Cuomo said. “He promised to take care of it. But that didn’t happen.”
Cuomo said he told all his workers to alert him if more of the Chinese board showed up, but heard nothing. It wasn’t until 2009, when the Chinese drywall problem became a public crisis, that he discovered that dozens of the homes PDC worked on had received the problematic board. The Consumer Product Safety Commission has since received more than 3,300 complaints from homeowners in 37 states.
“Nobody on the jobs said something to me after that first time,” Cuomo said. “The trouble is they all get paid by what they hang, so I guess there wasn’t a motivation to alert me. That, and if you’re talking about 300 sheets being there on a job and only five or 20 sheets were Chinese, they might have just missed it." He added, "That’s why Banner did it that way. They hoped nobody would realize they’d slipped us a little bit of it with the rest. Now my whole reputation has been tarnished.”
Cuomo said about 40 of the 90 homes that PDC helped build in a Vero Beach development, The Antilles, have now been confirmed as having Chinese drywall.
“We’ve found as little as three and up to 30 Chinese boards in the homes,” he said. “But it’s like being a little bit pregnant. Once you’ve got a little of it, these homes are having the problems with corrosion and the rest of it.”
Cuomo said it was Coffinas himself who first alerted PDC to a potential problem with the Chinese-made drywall. In 2006, when the housing boom was in full swing and drywall was scarce, Cuomo said a European broker approached him with an offer that sounded almost too good to be true: a train car full of drywall from China, available for a fraction of the market price.
“Banner and other suppliers were charging me $20 a sheet back then, and this guy’s offering me a train car’s worth for only $3 a sheet,” Cuomo said.
There was only one problem: Cuomo didn’t have a way to unload the car and get the material to his construction sites. So he turned to Coffinas for help.
“I went to Gus and said: ‘What do you think, can you help me out? We can both profit.’”
But Cuomo said Coffinas warned him off. “He said, ‘You don’t want to touch that Chinese board, it’s nothing but problems,’” Cuomo recalled.
Cuomo said Coffinas never mentioned an odor problem – he just indicated that the board was of poor quality. Cuomo said PDC inspected some of the Chinese board and reached the same conclusion. Not only did Cuomo turn down the discounted board, but he said he also told Banner that in the future his company wanted only American board.
It is not clear why Banner would have included small amounts of Chinese dry wall in its deliveries to Cuomo since both sides in the transaction were aware of its defects.
In October 2006, a WCI employee began alerting other Florida builders that Chinese drywall sold by Banner was emitting a foul odor, according to the sworn testimony of Donald “Mickey” Coblentz, a Banner executive.
“He was e-mailing builders and telling them that if you have Chinese drywall you have a problem,” Coblentz said in a deposition that is part of an ongoing civil suit against Banner in Miami-Dade Circuit Court. Coblentz added later in his testimony that he had never actually seen one of the e-mails but heard about them from other builders.
Coblentz, who sold the Chinese drywall to WCI and its installer, said he offered to remove Chinese drywall that any builder complained about and replace it with American-made drywall. He said he replaced material used by at least four different builders and drywall installers.
But Coblentz removed the drywall only for companies that complained to him. Scott Giering, another Banner executive, said in his deposition that Banner never told its other customers about the drywall problems.
Coblentz said most of the drywall he replaced was sitting in unfinished houses and had not yet been installed or “hung” on the walls. He said only two companies actually tore down problematic drywall after it had been installed and asked him to replace it with American product: WCI and GL Homes.
A spokesman for GL Homes did not respond to questions about whether it replaced drywall in 2006, but confirmed that the company learned of the odor issue from WCI that year.
As ProPublica and the Herald-Tribune first reported, WCI discovered odor problems in several of its homes as early as July 2006 and commissioned scientific testing. According to documents revealed in litigation, WCI told Banner that the tests concluded that drywall manufactured by Knauf Plasterboard Tianjin Co. Ltd. was to blame.
But Patrick M. O’Donnell, president of Pompano Beach-based Enviro Team, confirmed that his company conducted tests in 2006 that involved air sampling from homes and sniff testing of the board. He would not disclose the names of his clients or the results of the tests.
“We recognized back in 2006 that the wallboard was responsible for the sulfur odors, yes,” O’Donnell said. “But we didn’t measure anything that indicated a health hazard.”
The Banner executives apparently confused Enviro Team with another testing company, Environ International, in their depositions. Bob DeMott, a Florida-based managing principal for Environ International, told ProPublica and the Herald-Tribune that “no one from Environ had ever even heard of Chinese drywall in 2006.” DeMott said that the company did not do any tests related to Chinese drywall until 2008, when it was hired by Miami-based builder Lennar Corp. to investigate that builder’s own problems. DeMott said he could not recall when the Lennar testing began, but testing reports obtained by the Herald-Tribune and ProPublica show Environ was evaluating Southwest Florida homes for Lennar as early as the spring of 2008.
Environ International shared some of its testing with the Florida Department of Health that September, after local and state health officials learned of its work. To this day it has not publicly disclosed the results of testing it has conducted for more than a dozen Florida builders.
In his deposition, Coblentz said that by mid-October 2006 “word was spreading” fast throughout the industry about the drywall problem. But no one contacted customers or regulators.
In late 2006, Palm City-based D&A Construction Services told Banner there was “a bad smell” in the house of one of its customers, Coffinas said in his deposition.
Coffinas said he met David Hatcher, D&A’s president, at the house and watched as workers cut big circles of drywall from the walls so they could be sent for testing.
The samples were sent to the “independent lab that Dave had.” In his deposition, Coffinas, who was laid off from Banner last fall, could not remember the identity of that lab and said he never saw the test results.
Hatcher could not be reached for comment.
Meanwhile, word of the Chinese board was spreading within the South Florida building industry in 2006, Coffinas testified. In fact, it was being used by Banner’s competitors to persuade customers to go elsewhere, cutting into Banner’s bottom line. “Our competitors were using that as a negative sales tool against us,” he said.
Foul air from Chinese-made drywall has created a nightmare for thousands of homeowners.
The Story So Far
ProPublica and the Sarasota Herald-Tribune began examining in May 2010 what was—or wasn’t—being done to help people whose homes had been built with contaminated drywall. The problematic drywall, much of it imported from China, emitted foul odors and frequently caused mysterious failures of new appliances and electronics. Worse yet, some residents complained of serious respiratory problems, bloody noses, and migraines.