U.S. private equity firms have bought up producers and distributors of a chemical compound known to cause brain damage, cancer and other illnesses, according to a new report.

Blackstone and American Securities LLC, which control assets worth billions of dollars, have in recent years acquired operations in Canada and elsewhere that sell lead chromate, a toxic powder used in paint, on roads and machinery, and even in food, to brighten colors, add weight or withstand high temperatures.

The expansion of private equity into the lead chromate market comes as wealthier nations restrict its use and as other producers stop making it amid the growth of safer alternatives. 

Time and again, studies have shown declines in safety practices following private equity investment, including more workplace accidents and deaths. Health experts and others focused on corporate accountability say private equity’s expansion into the lead chromate industry is concerning.

"These firms set up structures for ownership to have zero legal responsibility for what happens at that company,” said Justin Flores, campaign director at the Private Equity Stakeholder Project, a U.S. nonprofit research and advocacy organization.

American Securities declined to comment on its lead chromate investment. Blackstone said it acquired a pigment company following a bankruptcy, noting the firm distributed small amounts of lead chromate.

“All uses of lead chromate put people at risk of lead poisoning and cancer,” said Perry Gottesfeld, executive director of Occupational Knowledge International and author of the report. OK International has called on the private equity companies to withdraw from the lead chromate industry.

Lead chromate has long been a major health concern. It contains both lead, which, when ingested, is known to lower IQ points and cause death from cardiovascular disease, as well as a certain kind of chromate, known as hexavalent chromium, which can cause cancer. 

In the 19th Century, officials in Brooklyn found lead chromate in low-grade pasta while authorities from London to Boston investigated illnesses linked to lead-laced candies. Around the same time in Pennsylvania, officials investigated dozens of cases of possible lead chromate poisoning from yellow cake.

Today, lead chromate in paint covers parking lots, children’s playgrounds, and hospitals from Mexico to Greece, studies show, raising concerns over what happens when the pigment breaks down, leaching lead into dust, soil and water runoff. Earlier this year, the U.S. Food and Drug Administration confirmed that lead chromate was found in cinnamon applesauce pouches that sickened hundreds of children. Investigations by The Examination, the New York Times and El Universo in Ecuador found that the tainted applesauce sailed through loopholes and food safety systems around the world.

“The more sources of lead you have like this, the greater the risk,” said Andrew Turner, an associate professor of environmental science at the University of Plymouth in the United Kingdom who studied lead chromate in road paint in Europe. “If you add that source to everything else - soil, paint on doors, gas emissions - it starts to build up,” Turner said.

Court decisions, regulations and negative publicity have seen the manufacture and use of lead chromate decline in many wealthier countries, including the United States. In 2021, after years of legal wrangling, a European Union tribunal upheld restrictions on the import and use of lead chromate. The lawsuit was sparked after a lead chromate distributor – which later changed names and became the company that Blackstone recently acquired – attempted to sell the product to some of its 100 customers. The European court found that safer alternatives exist.

In the United States, laws and regulations limit the amount of lead in household paint and coatings on children’s toys and certain furniture. The Food and Drug Administration has issued lead limits on a small number of baby food items and has repeatedly pushed Congress to expand the restrictions.

Yet more than half of the world’s countries – from Afghanistan to Chad to Nicaragua – have no reported legal restrictions on paint containing lead chromate, according to the World Health Organization. 

Recent studies show that paint made with lead chromate remains widely available, including for use at home. In one 2022 study from Zimbabwe, 70% of household paint samples contained more lead than the recommended limit established by the World Health Organization, while studies last year found that almost one-third of paint samples in Senegal and almost half in Angola had dangerously high lead levels. Paint brands with high lead levels included those imported from Morocco, China, the United Arab Emirates and the United States, according to the studies.

The industry is aware of the gap.

“There is definitely an opportunity to sell more lead chromate pigments in developing countries where they would be needed for architectural (new buildings) and industrial (new construction equipment) purposes,” David Wawer, executive director of the U.S. pigment lobby group said in a 2020 interview. “There generally are fewer regulations in these regions regarding what types of pigments can be used.”

Wawer did not respond to repeated email requests for further comment.

U.S. private equity makes its moves

In April 2022, American Securities LLC, a New York-based firm, inked a deal through a portfolio company that combined existing lead chromate firms into a new multi-billion dollar company, Vibrantz Technologies Inc.  

“Caring is the core of safety,” the new company now says online. It manufactures a range of products across more than 60 plants and advertises the sale of orange and yellow lead chromate.

Vibrantz Technologies did not respond to a request for comment.

American Securities’s investment policy includes social and environmental factors. Asked whether it had considered the health risks of lead chromate in its investment decision, American Securities declined to comment.

Last year, Blackstone, another private equity giant, purchased the Canadian firm DCL.

DCL previously partnered with Xinxiang Highland Pigments Co. Ltd., a Chinese producer of lead chromate. DCL closed its own lead chromate factory in Canada in 2023, with one senior advisor to the company attributing the decision, in part, to competition, regulatory challenges and its distance from markets in Asia, the Middle East, Africa and Latin America. DCL continues to sell lead chromate produced by other firms and insists that its customers should only use the product where permitted and not in residential paint, food, cosmetics or other consumer items. 

“Resale of … third-party products represents only about 1% of our business today,” Wayne Besler, chief executive of DCL, told The Examination, referring to lead chromate. “Our offerings for lead chromate alternatives, on the other hand, are dramatically larger.”

A spokesperson for Blackstone said it had been a lender to DCL and acquired the company after a financial restructuring. DCL stopped making lead chromate before Blackstone’s ownership, the spokesperson said.

“These products will eventually break down and release lead in dust and soil that is accessible to children through regular hand to mouth contact,” said Gottesfeld from OK International.