Return to Section 1

 

Accidents and Spills

Horizontal Integration: Other WMI Services

 

Chronology of KnownWMI "Donations," Gifts, Honoraria, and Bribes

 

""Breakfast with Buntrock: A Chronology of the WMI/EPA Scandal

 

Antitrust History of Waste Management, Inc.

 

WMI's Questionable Liability Insurance Situation

 

The Empire Expands: International operations

Argentina

Asia

Australia

Canada

Europe

Japan

Mexico

New Zealand

 

Fight the Power that Pollutes: Examples of Victories over WMI

Anti-Waste Management Organizations

ACCIDENTS AND SPILLS

The transportation of hazardous waste and garbage poses an additional

threat to communities across the country. Not only does the shipment of

waste create sacrificial dumping grounds such as Emelle, Alabama, but

spiels and accidents that occur in transit can cause sudden releases of

extremely hazardous materials into a residential community. Between

1982 and 1987, %1 reported 31 of-site spills of hazardous waste to the

U.S. Department of Transportation (D0T). (264)

 

1982-83

CWM spills Supered waste at the Solvent Resource Recovery, Inc.

facility m West Carrolton, Ohio. (67)

 

March 1983

A CWM-leased barge containing 20,000 barrels of rainwater con-

taminated with hundreds of toxic chemicals strikes a bridge on the Tom-

bigbee River in Alabama. The collision creates a gash in the barge, which

was not certified to carry any type of hazardous waste, according to the

Coast Guard. The Coast Guard later penalizes CWM $2,000. (414)

January 1984

A WMI truck spills 36,000 pounds of hazardous waste in Waldo, Ohio.

6264)

 

 

 

 

February 23, 1984

 

CWM is cited in Las Vegas, Nevada, for transporting hazardous waste in

an improper manner and for failure to report the release of hazardous

wastes within the required time limit. CWM is charged by the U.S.

Department of Transportation for improper transport of hazardous

 

page 111

 

materials and failure to properly report a chemical release incident.

CWM later pays a $5,000 annually. (414, 5#9)

 

March 6, 1984

A WMI toxic waste truck ruptures in Orlando, Florida, and releases 3,200

guidons of an orange acid solution. Thirteen people super injuries, par-

tmularly skin and respiratory irritations. One hundred and fifty people

are evacuated. (264)

 

September and October 1984

A CWM subsidiary is charged with transporting waste in an un-

authorized cargo tank on numerous occasion from Newark, New Jersey,

to Upton., New York. A $5,000 penalty is paid to the DOT. (414)

 

 

 

October 9, 1984

 

WMI recently acquired SCA Chemical Services plant in Newark, New

Jersey, spills 500 gallons of waste solvents onto the dioxin-contaminated

Diamond-Ai szt,e in Newark. The leak continues for several hours

afore it is discovered by SCA workers. (73)

September and October 1984

 

May 17, 1985

A CWM transportation subsidiary is cited by the Illinois Department of

Transportation for shipping hazardous wastes without proper identifica-

tion. They later pay a $1,650 penalty. (414)

 

September 12, 1985

CWM is charged with failing to notify the Alabama Department of En-

vironmental Management of a spill of reportable quantity at its smells,

Alabama, facility. (414)

 

 

 

February 24 and 25, 1986

A CWM driver is charged by the Illinois Department of Transportation

with violating regulations by transporting waste without proper venting

capacity, piping protection, or closure means. CWM later pays $3,900 in

ci 'vc penalties. (414)

April 1, 1986

CWM Transportation is cited by the Illinois DOT for improperly transport-

ing xyJene. It later pays a $3,900 penalty. (414)

May 1986

The West Virginia Department of Highways cites CWM for manifest air-

regularities and transporting waste in leaking packaging. CWM pays a

$5,800 penalty. (414)

November 4, 1.986

WMI settees out of court with residents who sued their subsidiary, City

Disposal, for dumping an estimated 13,000 ss-gallon drums of chemicals,

including benzene and vinyl chloride at a Uniroyal, Inc. site in Stoughton,

Wisconsin. The residents decided to sue City Disposal, which was later ac-

quired by WMI, after tests by the state Department of Natural Resources

showed their well water is contaminated and that Uniroyal hired City Dis-

posal to dump chemicals near their residences and businesses in the town

of Dunkirk. 6541)

 

November 18, 1986

A Waste Management of Ohio (MOi truck is involved in an accident

with a storage tank in Newark, Ohio, releasing hydrochloric acid. WMO

pays a $2,000 penalty. (414)

November 26, 1986

Chem-Nuclear Transportation of farewell is identified by the EPA as a

potentially responsible party at the Maxey Flats Superfund site in Ken-

tucky. (414)

 

page 112

 

October 7, 1987

 

An inspection of a CWM truck wash falsity by Louisiana Department of

Environmental Quality officials leads to the charge that CWM illegally

discharges contaminated wastewater from the truck wash plant in Slidell,

Louisiana. (414)

 

April 1988

CWM signs a consent decree as a potentially responsible party for the

Bayou Sorrell Supered site in Texas for activities associated with its

Port Arthur, Texas, hazardous waste transportation operations. (414)

 

 

October 6, 1988

CWM sips a consent order as a potentially responsible party as

transporter and generator of wastes associated with a spring-field, Ohio,

Supered site. (414)

 

 

 

July 1989

 

Seven hundred and forty safety violations are found in the inspection of

312 CWM waste-hauling trucks by Alabama state troopers. Eighty three

of the 312 trucks were transiting PCB-containing dirt. Fifty-one of the

312 were not allowed to contour their trip. (519)

 

Two workers are injured during fires at a waste transfer station owned by

WMI of northwest Indiana. People within a half-mile area are evacuated

from their homes. (415)

 

August 1989

  HORIZONTAL INTEGRATION: OTHER WMI SERVICES

Through company subsidiaries or large-share investment in other com-

panies, WMI has diversified into a variety of other waste disposal and re-

lated services, including laboratory services, portable toilets, asbestos

removal, lawn chemicals, and chemical treatment (stripping and biotech).

1988

WMI enters the lawn chemical services market by forming its Truckmen

subsidiary.

Lawn ''care'' chemicals include toxic pesticides. Many of these chemi-

cals are products that the federal government has been prohibited from

using on its own uninhabited property. Ingredients classified as ''inert''

are allowed to be kept secret-despite the fact that they are often more

toxic than the active ingredients and may comprise 99 percent of a pes-

ticide formula.

Many lawn chemicals may remain active for a month to a year or more

air applied. Risks, especially to children and pets who play on recently

sprayed lawns, are great. Potential health threats east from skin absorp-

tion and breathing sprays, dusts, or vapors which can persist even after

drying. long-term problems associated with lawn ''care'' poisons include

miscarriages, birth defects, chemical sensitization, immune suppression,

liver and kidney dysfunction, memory loss, heart disturbances, lowered

fertility rates, and cancer. Lawn ''care'' chemicals can also contaminate

groundwater and wells and destroy healthy soil. (616)

Lawn ''care'' companies such as cl's subsidiary ''Green. per-

petuate an artificial desire to obtain the imaginary ideal of the ''perfect''

green lawn, while disguising the risks involved in using their products.

page 113

February 2, 1988

CWM Asbestos Contractors is cited for failure to obtain a license for asbes-

tos abatement work and failure to provide a certified foreman to supervise

the work at the General Motors Corporation Plant in Doraville, Georgia.

CWM later pays a $1,200 penalty. (414)

April 21, 1988

Queen City Waste Systems, Inc. of North Carolina, a WMI subsidiary, is

cited by state aerials for failure to satisfactorily collect and transport as-

bestos for proper disposal. (414)

September 1988

WMI shreds tires at eight shredding facilities. Much of the shredded

scrap is then bled in industrial furnaces and cement kilns. (618)

Heave metals, dioxids, forays, and PCBs have been detected in emissions

from tee incinerators. (694) In September of 1988, an attorney for a com-

pany interested in Milwaukee's tire-shredding contract accuses city offi-

cials of ''rigging'' the bidding process to favor WMI. The attorney alleged

the city included specifications and a timetable in the bidding process

that would have prevented any out-of-state company from getting the con-

tract. WMI is under public scrutiny because of its ties to former city offi

dials, Former city Sanitation Superintendent William An Kappel resigned

his its in August of 1988 to work for WMI, and former city Development

Commissioner William Drew, who resigned during the summer, owned

more than $50,000 worth of WMI stock while he was a city official. (53$

1989

CWM owns a facility in Newark, New Jersey, that treats liquid wastes via

oxidation, neutralization, cyanide, and aqueous waste treatment. The

facility also functions as a service center for transportation, remedial ac-

tion, and small quantity generator services. After CWM acquired the

facility in 1984, they received a number of compliance citations. The

largest penalty paid was $5,000. (472)

page 114

CHRONOLOGY OF KNOWN WMI "DONATIONS," GIFTS, HONORARIA, AND BRIBES

WMI has okn dealt with its reputation as a major polluter by buying out

its potential opposition at various levels-from Congress, where it lobbies

for legislation favorable to the company (WMI was the seventh largest cor-

porate PAC between 1987 and 1988-see Appendix I to see of you repre-

sentative or senator recently took money from <1), to federal agencies

where it hires ex-employees before and or seeking new facility permits

and government contracts (see Appendix L for a list of public o<cis who

have passed through the ''revolving D-r''), to communities where it is

operating or seeking to operate local landfalls and incinerators. The mas-

sive and inestimable mounts of WMI largesse has come in various forms,

ranging from sponsorship of public radio and television, to gifts to

museums and universities, to contributions to leal civic organizations

such as local chapter of the league of Women Voters. WMI has also suc-

ceeded in Ending numerous national environmental groups to take its

money, using the goodwill gibed. to ''greenwash'' its image (see Appendix

A).

The result of WMI money spending has ken everything from polite

cai influence on Capitol Hill!, to recognition in Chicago as one of the city's

leading corporate sponsors of the ads. Contributions to critical media out-

lets such as National Public Radio (NPR) and the Public Broadcasting

System (PBS) have resold in an improved image for the company. PBS

has run 'its recycling commercials on many occasions. Coincidentally,

these media outlets have tended to avoid news stories critical of the company.

WMI frequently works with community groups and local governments

on roadside litter or household hazardous waste pickup days, supposedly

to help clean up the community. They own try to give money to environ-

mental groups of all sizes, allegedly to help them continue their food.

work. But another possible pulse of such demonstrations of civic good-

will is to make communities and environmental groups ''owe'' Waste

Management something. This debt often results in silence when protest

is in order. The spread of WMI money on a leal level often results in. a

divided community during a facility sating or expansion battle. So, before

you accept money from <1 to sensor a civic event, know that the lunch

is not free, and the price is often pollution.

What follows is a partial chronology of <1 parents to public offi-

cials, civic and environmental organizations. The chronology does not 1n-

clude laments made by WMI subsidiaries, subsidiary Political Action

Committees, individual employees or their families.

1972 - 1975

WMI pays Chicago-area politician Patrick Oclock $55,885 to ''neutralize

any adverse community or political reaction'' to a landfall. (272) A 1974

WMI memo written by vice president Peter Huizenga indicates they

hoped O'Block would seek Chicago Mayor Richard Daley's ''intervention''

should opponents succeed in derailing the project. (2724

1975

WMI lobbyist William Mofatt is indicted on charges of attempting to

bribe Cooper City, Florida, vice Mayor Alert Carlson to obtain a garbage

contract. The charges were dropped after a key! witness changed his

story. Instead, Carlson was conked of solicited a bribe from Moffatt

page 115

and was sentenced to two years in prison. (274)

1976

The Securities and Exchange Commission (SEC) charges that WMI and

two of its executives (H. Wayne Huizenga, vice chairman of Mrs board

of directors, and Earl Eberlin, a WMI regional manager in the

southeastern U.S.) violated federal securities law between 1970 and 1976

by maintaining a secret ''slush fund' for unlawful parents and by

making a $35,000 concealed contribution to the Ontario Progressive Con-

servative Political Party. The SEC complaint notes $71,000 m total

''dubious outlays,'' including campaign contributions in Florida and

Canada. The $35,000 parent was made one week before a Ministry of

the Environment aerial seqed a provisional certificate for the Toronto

Maple Pits site, and the minister ordered the town of Vaughn to rescind

an anti-dumping ordinance. The SEC alleges that the WMI contribution

was improperly capitalized on its #L as a landfill unit cost. An inter-

nal WMI memo asserts that the political contribution as part of a program

to ensure a solid waste plan prepared by WMI consultants that includes

Maple Pits as a key feature.

According to the Wall Street Journal, the fund was generated by ''un-

recorded cash receipts arising out of a sanitary landfill in Florida.'' WMI

later signs a consent order promising not to repeat the mistake, thus

avoiding litigation and any admission of guilt. (90, 95, 273, 439, 456, 457,

740)

1979

Rick Schwartz, a former Muriate City, Florida, Commissioner, testifies in

court in exchange for smutty from prosecution that he sold his vote on

a 1979 city garbage contract to WMI for $3,000. The charges against City

Commissioner George Liederman are later dropped. Jack Tobin, another

Commissioner, is acquitted of charges brought against him. (41, 273)

1980s

According to court papers filed by federal prosecutors, Lewis Goodman,

the manager of Mrs subsidiary, United Sanitation Services (USSX ab

levelly bribed a Miami, Florida, city sanitation inspector to steer business

to USS. Goodman was convicted of price-fixing charges in 1986. WMI

fared Goodman over the incident. (273)

1981 - 1982

1981 - 1982

WMI, its subsidiaries, and executives, give Chicago Mayor Jane Byrne

$13,000 in campaign contributions during 1982 when she extended cer-

tain WMI waste-hauling contracts. (123) One FMI subsidiary buys

$8,300 in tickets to a Byrne fundraising dinned. (200)

July 1882

Sumter Investments Political Action Committee (PACX chaired b! CWM

attorney Dragon Pruitt of Alabama, is formed. By April 1984, this PAC

will have given more than $31,000 to candidates in Alabama and Missis-

sippi. 627)

March 1983

The Chicago Sun-Times reveals that since a <1 PAC was formed in

June 1981, it has given $65,000 to 64 politicians nationwide, including a

total of $10,500 to nine House candidates from Illinois. Major recipients

of WMI money include 'publican Senator Charles Percy ($3,000),

Democratic Senator AIM Dixon ($1,500), Democratic Representative Dan

page 116

Rostenkowski ($2,000), Republican Representative Henry J. Hyde

($1,500), and Republican Representative John N. Erlenborn ($1,450). 6560)

1983 - 1987

WMI donates nearly $1 million to launch and sustain the environmental

Institute for Waste Management Studies at the University of Alabama in

Tuscalusa. (274)

1984

WMI secures the contact to serve as the official 1984 Olympic garbage

collector, a fact proudly displayed on the company's annual reps. WMI

also sponsors the 1984 presidential debars in Louisville, Kentucky. (23)

February 1984

U.S. Representative Paul Simon announces that he +11 return a $500

campaign contribution from WMI because he wants to ''avoid any sugges-

tion that I would condone any irresponsible dumping of toxic wastes.''

(202)

March 1984

EPA investigates two unnamed high-level EPA officials who own substan-

tial WMI stock. One, who works in the EPA Toxic Substances Division,

owns $29,000 in WMI; stock. The other WMI investor works for the EPA

Water Quality Division. (201)

1985

WMI gives a $100,000 grant to National Public Radio program ''All

Things Considered/' sconcing one of the largest corporate sponsors of the

award-winning news show. (23)

1985- 1986

WMI contributes $248,763 to congressional races in the U.S., up from

$11,550 in 1979. (272)

October 1985

WMI pays $1,200 to hold a fundraising party for Florida Secretary of

State Gorge Firestone. (272)

Christmas 1985

CWM mails $500 ''Christmas checks'' to numerous Alabama legislators.

(64)

June 4, 1985

The Wall Street Journal reports that Representative Walter Jones (D-

NC), chairman of the House Merchant Marine and Fisheries Committee,

confided in a private briefly with 20 top WMI executives that he per-

sonally opuses a bill that would delay <1 bean incineration plans in

the Gulf of Mexico. WMI subsequently paid Jones $2,000 in honorarium

fees. (124)

1985 - 1987

WMI's PAC is the 24th largest of 1,779 corporate PACs during 1985-86

with contributions totaling $284,763 and was seventh in 1986-87 with con-

tributions totaling $430,994. 6272, 410, 601)

January 23, 1986

WMI lobbyist Raymond Akers pleads guilty to mail fraud and charges

that he paid $6,500 in bribes to Chicago Alderman Clifford P. Kelley (20th

ward). Akers cooperated extensively in the FBI Operation Incubator inves-

tigation. In his plea agreement with prosecutors, Akers stated that he

''participated the certain corporate oscars of Waste Management in con-

ferring secret benefits com Waste Management to certain office holders.''

(368, 417, 766)

page 117

March 13, 1986

John Horak, general manager of HOD Disposal, a WMI subsidiary, is

charged with mail fraud and convicted after a jury trial and sentenced to

jail for briber!. Horak is sentenced to a six-month jail term and fined

$25,000 for bribing Fox Lake, Illinois, officials to obtain hauling contracts.

Horak paid $12,000 in bribes to the Fox Lake mayor and a village board

member. Horak said earlier the bribes were approved by James DeBar,

a vice president of WMI and president of Waste Management of Illinois.

No charges are feed against WMI or its Illinois subsidiaries. (26, 273)

Okaloosa Sanitation Company files suit against the mayor and commis-

sioners of Shalimar, Florida, over the city! s contract with Environmental

WYE Systems (EWS), a wholly owned WMI subsidiary. Although

Okaloosa Sanitation was the lowest bidder, Shalhnar awarded EWS a gar-

bage collection franchise. The family of Shalimafs mayor, Bart Hudson,

sold a sanitation firm to EWS in 1984; in turn, EWS was sold to WMI. Ab

though Hudson had bled a memorandum of voting contact with the town

clerk in November 1985, the mayor later denied any conflict-of-interest.

The Okaloosa suit is eventually dropped, and Okaloosa is sold to EWS.

Bart Hudson later finds employment with EWS while still mayor of

Shalimar. As of 1990, WMI held all the recycling business in Okaloosa

County except for three towns: Niceville, Crestville, and Fort Walton

Beach. (109, 110, 681)

April-May 1986

The Chicago Tribune reports details of a federal investigation into 'its

relations with Chicago city officials. Investigators are trying to determine

whether or not WMI has engaged in a pattern of attempting to buy in-

fluence and whether this pattern is in violation of federal racketeering

laws. (122) Among the suspicious evidence: WMI lobbyist Raymond

Akers says he was directed by ''top <1 officials'' to pay $10,000 to

Chicago City! Alderman Clifford Kelley when Kelley supported a WMI bid

for a major city garbage hauling contract; expensive gifts to politicians;

complimentary flights aboard cl's fleet of corporate jets for Chicago

Alderman Edward Vrdolyak and other Chicago officials; and a all-paid

luxury vacation to Mexico for Chicago Corporation Counsel James

Montgomery and his family. (18, 503a)

June 25, 1986

Common Cause reports that <1 gave $57,000 in honoraria to U.S.

senators and representatives in 1985, ranking tenth in the country, up

from fourteenth in 1984. (131)

July 1986

WMI donates $100,000 for the restoration of the Statue of Liberty.

1987

Dean Buntrock, chairman off! and a big game hunter, is elected to the

Board of Directors of the National Wildlife Federation (NWO. WMI

donates land in the Midwest to NWF for use as a land preserve. (see Ap-

pendix A.!

Spring 1987

WMI food donations for the hungry are rejected by St. Kevins Church in

Chicago and the United Neighborhood Organization because the dona-

tions are viewed as a company effort to buy out community opposition to

its waste disposal operations m the southeast side. The Church is

page 118

situated near Mrs DO land-landfill and SCA incinerator on Chicago's

southeast side. (648)

April 1987

The National Audubon Society accepts a $19,000 grant from WMI to

develop bear-proof garbage containers in West Yellowstone, Montana.

(312)

April 25, 1987

Former Chicago Alderman Clifford Kelley admits to taking cash and

other gifts from WMI and pleads guilty to four counts of mail fraud and

one count of filing to file a 1985 federal income tax form. Kelley helped

<1 obtain an option to buy land at 65th and State St. (166) Kelly is

later sentenced to one year m jail. (225)

May 1987

Twenty one high school students receive $1,000 each for academic excel-

lence and 94 other students receive a total of $5,950 from WMI on various

occasions in southern Florida, including contributions for participating in

a school project called ''A Day in the Life of Waste Management'' a com-

pany-sponsored program to educate students about garbage-handling

operations. WMI executive Joseph Jack explains ''when they grow up

they can't say anything nasty about Waste Management because maybe

we made it possible for them to go to college.'' (272)

WMI gives the Adler Planetarium of Chicago $150,000 to kick ova ''Cam-

paign for the Brightest Star.'' CWM President Jerry Dempsey is the

Planetarium's vice chairman and chairman of its capital funds campaign.

(717)

1987- 1989

WMI donates $892,000 in grants to national environmental groups. (see

Appendix A.!

Summer 1987

WMI gives one of its largest donation to date: a $500,000 gift to help build

a performing arts center in Fort Lauderdale, Florida. (274)

F51987

October 1987

WMI pays $948 to hold a fundraising part for North Lauderdale,

Florida, Mayor John Hart. Hart is a candidate for Broward County Com-

missioner. <1 is at the time the only firm that hauls tràsh in North

Lauderdale. (272)

1988

WMI funds ''Only One Earth a PBS-F special. (434)

July 1988

The Fresno Bee reports that WMI is sponsoring a convention party for

House Shaker Jim Wright. (635)

August 25, 1988

The. Chicago Tribune remits that the president of the Kane County

Forest Commission, Philip Elfstrom, accepted a donation in 1981 from

WMI to help his bid for a National Association of Counties (NACO) once.

Previously Elfstrom had ken fond of minting out that his campaigns for

public once were Seances without outside contributions and swore to the

Illinois Pollution Control Board in a deposition on April 23, 1987 that he

never accepted campaign contributions from <1. In his forest preserve

position, Elfstrom helps supervise the Settler's Hill landfill of-rated by

WMI. (367)

page 119

In 1981, Elfstrom was elected a vice president of NACO, a private na-

tional lobbying organization based in Washington, DC. Four years later

he was elected president. In 1990, NACO lobbied members of congress to

drop a 25 percent recycling provision and drop the hazardous waste clas-

sification for incinerator ash under the reauthorized Clean Air Act.

In June of 1988, Elfstrom urged the Kane County Board to spore a

plea from Aurora's mayor to spend money earmarked for municipal recy-

cling programs. The board voted instead to use the funds to promote coun-

ty tourism and entertaining visiting dignitaries. (677)

September 14, 1988

CWM gives $2,500 in conjunction with the Business Council of Alabama

(which gave $19,000) to a majority of members of a state House commit-

tee that virtually killed proposed toxic waste measures. Committee chair-

man G.J. ''Dutch'' Higginbotham received a total of $2,500, but says the

money did not influence his action on the hazardous waste legislation.

(330)

October 1988

Former Alderman. Edward R. Vrdozyak (10th ward) acknowledges to a

Chicago Sun-Times columnist that he has used WMI planes for free

flights from Chicago to Marco Island, Florida, where he owns a con-

dominion. A security firm owned by Vrdolyak's brother, Alderman Victor

Vrdolyak (loth ward), provides the security for cl's CID dump and

SCA incinerator in Chicago's southeast side. Ed Vrdolyak comments that

''1 wish there were more of them,'' referring to the dumps in the loth

ward. Commenting on this area, University of Illinois geography profes-

sor James Landing says that ''the stage is set here for one of the greatest

ecological disaster in the history of North America. Beside this, love

Canal *11 be nothing.'' (416) Landing says that Vrdolyak made it possible

for the massive dumping: ''While he was alderman the Zoning Board of

Appeals passed out sanitary landfill zoning variances as if they were pep-

permint candy sticks.'' (660) In 1990, a WMI spokesperson says the com-

pany is still contributing thousands of dollars to political funds controlled

by Ed Vrdolyak. (660)

1989

Opponents of a <1 Taylor County, Georgia, hazardous waste in-

cinerator facility arousal point out that the consultant the state ap-

pointed to advise At on the site's safety, P.E. Ldoreaux, has ties to the

Environmental Institute for Waste Studies, established at the University

of Alabama with money from WMI. Through 1989 the Institute for Waste

Management Studies received 5J percent ($1,505,000) of its budget from

WMI. (595, 461, 698)'

Dr. James Taylor, a professor of economics, when asked to comment on

the Institute says, ''A lot of the faculty of the University (of Alabama)

don't trust the Institute for Waste Management Studies as being totally

objective because of its ties to Waste Management'' 4697) ''How could Mr.

L'oreaux be objective?'' William S-jour, Program Analyst of EPA'S of-

Ece of Solid Waste adds, ''if you read any of the Institute's past publica-

tions, you see they're sort of laundering policy positions of the waste

management industry.'' (697)

1989

The potential listing of the Bay Checkerspot buttery as an endangered

page 120

species threatens to block Mrs Kirby Canyon landfill expansion plans

near Morgan Hill outside of San Jose. California. WMI invites a local

biologist to their site. Later, the YJ'A Journal reports that WMI has been

depositing $50,000 annually in the Kirby Canyon Habitat Trust Lund.

''is a result WMX of California has not yet been able to proceed with its

1=+1 operations in Kirby Canyon, but has received considerable

favorable publicity as an ecology-minded company as wel1,'' including an

Environmental Preservation Award from Stanford University s Center for

Conservation Biology ''for exceptional contribution to biological diversity''

(508)

cl's expansion covers 15 percent of the butterfly's habitat, in spite of

the fact that Stanford scientists say ''the remaining San Mateo Bay Check-

erspot butterfly population has a doubtful prognoses furlong-term sur-

vival.'' The landfill also occupies the habitats of the imperiled red-legged

frog and the Mount Hamilton thistle. WMI claims it has adopted a cor-

porate policy of ''no net loss'' of biological diversity. The Bay Checkerspot

buttery has become the WMI subsidiary's mascot. (508)

<1 also flew prominent citizens from Portland, Oregon, to San Jose

to showcase the Kirby Canyon 1=511 and win a $360 million, zn-year

Portland transfer station contract. (443)

In the winter 1988 issue of WfHerraesa magazine, WMI ran an adver-

tisement claiming ''we Profit By Protecting The Environment,'' referring

to the Kirby Carryon. landfill. By the time the advertisement ran, leaks

from the ''state-of-the-art'' landfill had begun to contaminate groundwater

at the site, with waste escaping past the retaining wall that was supposed

to trap the leachers. The California Regional Water Quality Board

noticed WMI on October 3, 1988, thpt the 1=4&1 leachate and a

groundwater monitoring well both indicate the presence of volatile or-

ganic compounds JOCs) such as Freon 12, A,l,l-trichloroethane (TCAJ,

and J,l-dichloroethane (DCA).(620)

Residents of Morgan Hill and Coyote Canyon who bitterly fought WMI

were not surprised when the ''carefully operated'' facility started leaking.

''If was the craziest thing in the world to build near our largest reservoir

and between two groundwater basins,'' exclaimed Pat Figaro of the

Santa Clara County Water District board of directors. (362, 363)

1989

WMI donates $100,000 to NPR and supports the PBS with about $50,000

annually, spec-call! as a sponsor of ''Nova.'' In turn, Wmi; commercials

are run on PBS, touting the company's leading role as a recycles. (549)

1989

JE Nold, general manager of 'its Milam land-landfill near Belleville, 11-

linois, sits on the board of directors for Proud Partners, a local environ-

mental group. Proud Partners has endorsed incineration as an

environmentally sound method of waste management particularly suited

for the tri-county solid waste plan. Proud Partners is also a member of

Keep America Beautiful, cc. and a division of Belleville Economic

Progress, cc. (544)

1989

WMI distributes $4,251,406.80 of hazardous waste tax monies to various

cities and agencies in Sumter County, Alabama, host to the Emerge

Page 121

landfall. An additional $359,000 is allocated to other agencies, including

$100,000 to the Alabama Department of Environmental Management, the

state agency that regulates the landfall. (594) CWM also calls local

citizens to ask for use of their names so that CWM can send a telegram to

the state legislature in opposition to a tipping fee tax increase. (595)

1989

WMI offers ''lame to Think,'' a zz-minut,e drug education video to schools

and community groups in the communities it serves. The video is also

made available for free rental through 925-plus Blockbuster Video stores

nationwide. Blockbuster is largely owned by former WMI board member

H. Wayne Huizenga. 6554)

A year later, the U.S. Drug Enforcement Agency awards Cc's technic

cai service group a three-year contract estimated at $40 million to dispose

of chemicals discovered in drug busts. (711)

WMI donates $38,000 a year to Carver Area High, a high school in

Altgeld Gardens near its CID landfall. (661)

1989

March 1959

Porter, New York, Councilman William Hastings admits he has mixed

emotions about his town. making money ova facility (the CWM Model

City land-landfill) he called ''a deterrent'' to development in Porter. ''1 don't

like the idea that hazardous waste money is building the town up.'' Be-

cause of a 1986 state law, Porter received $786,557 m 1989 from a a-per-

cent tax on the annual gross receipts at Model City. (611)

April 1989

Richard Sullivan, longtime chief counsel of the House Public Works Com-

!

mitre, flies to Chicago at committee expense to meet with WMI officials

and tour the firm's lab. WMI pays Sullivan a $2,000 honorarium for

speaking to company employees during his visit. The trip was arranged

after Sullivan called Frank Moore, former chief lobbyist for the Carter

White House, now vice president for government affairs at WMI. (645)

1990

WMI is one member of the National Wildlife Federation's Corporate Con-

servation Council that has donated more than $200,000 to sponsor

''Managing Environmental Issues,'' a pilot environmental course at Bos-

ton University's School of Management. (705)

1990

WMI sponsors the Chicago Lyric Opera's 1989/90 production of ''Ls

Clemenza di Tito'' and the J990/91 production of ''carmen.'' CWM Presi-

dent Phillip R!ne!' sits on the board of the Chicago Lyric Opera. (593)

WMI also underrates the cost of Urmc/e Vn.rayô at the Goodman Theater

in Chicago. (660) The Museum of Contemporary Art in Chicago also

reveals that WMI! sponsors ''vernissage 89,'' a museum exhibit, with a con-

tribution of $10,000 or more. (716)

February 1990

Montgomery County District Attorney Jimmy Evans returns $1,000 in

contributions after learning that the money came from PACS funded by

CWM. (510)

March 1990

The Multinational Monitor reports that Alexander Trowbridge, a member

of cl's board of directors, serves on the National Council of the World

Wildlife Fund. (655)

page 122

April 1990

The Backs County, Pennsylvania, Courier Times rearms that family and

friends of Allentown trough orchis have den given jobs, contracts,

and other perks since WMI began operating the lzl-ac're TUIIW=

Asources land-landfill in July of 1988. Two yeah ago, the borough was hin-

ning a $180,000 deficit. ''Now it has a $4.6 million surplus, from fees cob

letted for its mountain of trash rising above the old homes that line ME

Street.'' Councilman Edward Czyzyk says Tullytown officials are 'spend-

ing money like a bunch of drunken see-ors.'' The companion and the

brother of councilwoman Sally Madden are both given sign-cant con-

tracts and jobs. Since last June, the borough has given four landscaping

contracts totaling $30,482 to Pennsbury Landscaping, a fun owned by

wmi; official Prank Branagan. Branagan was instrumental in negotiat-

ing a contract that brought the landfall into the trough. (647)

!1 volunteers dean up the litter air Earth Day in Chicago's Grant

Park. (660)

Sumter County, Alabama, residents fear a planned tax increase will cause

CWM to reduce gifts to local community organizations. Gifts made

during the previous year include a $10,000 gift to the University of

Alabama School of Law, $1,000 to the Alabama Water Ski club, $750 to

the Sumter County Junior Miss Pageant, and community service awards

totaling $12,000 in 1989 and $16,000 in 1990. (739)

April 22, 1990

June 1990

Late September

1990

The Federal Election Commission announces that Mrs PAC is the

largest in the metro Chicago area. Between January 1989 and September

30, 1990, cl's PAC contributes $359,930 to congressional candidates.

(see Appendix 1.) (601)

WMI partially underwrites the thirèen-pirt National Public Television

series, ''rfhe New Explorers.'*

January 1991

..BREAKFAST

WITH

BUNTROCK'':

A CHRONOLOGY

OF THE WMI/EPA

SCANDAL

..BREAKFAST WITH BUNTROCK'': A CHRONOLOGY OF THE WMI/EPA SCANDAL

WMI and other waste disposal industry players have seen their ability to

do business threatened by states which, 'm an eeort to protect the enthrone-

ment have attempted to enact laws with environmental discharge

provisions potentially strict enough to block disposal companies from is-

tablishing or expanded waste facilities. During the late 1980s, the waste

disposal industry attempted unsuccessfully to influence the EPA to force

states (especially North Carolina) to stop enacting such laws. In 1989,

WMI CEO Dean Bedrock directly lobbied EPA Administrator William

hilly. These discussions took place privately and eventually became the

subject of an investigation by the House Energy and Commerce

Committee's Subcommittee on Oversight and investigations. What fob

lows is a chronology of the events lea 'ing up to that investigation, which

was eventually dropped without explàation.

January 22, 1987

North Carolina enacts slaw restricting the discharge of treated hazard-

ous waste into state wafers. The law, more stringent than federal stand-

ards, limits the size of a proposed GSX Chemical Services (a hazardous

page 123

waste disposal company) facility along North Carolina's Lumber River by

requiring waste plants m the state to dilute each gallon or treated was-

tewater with at least 1,000 gallons of pure water before discharge into

rivers and streams. The stream by the proposed GSX plant frequently

runs too low to do so. GSX contends the law is arbitrary and aimed at

preventing the company from building the plant. State and local officials

say the law is intended to protect drinking water. The GSX plant would

discharge as much as 500,000 gallons of treated waste daily into the Lum-

ber River, the main water supply for much of Robeson County. Officials

from WMI perceive the law as a threatening precedent that could restrict

their business practices if applied elsewhere where they would like to ex-

and their operations. (400, 699)

November 17, 1987

After reviewing GSX complaints about the new North Carolina law, the

EPA opens hearings to determine whether the agency should withdraw

North Carolina's authority to control hazardous waste disposal. (396)

December 23, 1988 Facing considerable adverse reaction from officials from North Carolina

and key members of Congress, lee Thomas (William Reilly's predecessor

as EPA head) suspends the North Carolina hearings. Thomas says the

Resource Conservation and Recovery Act allows states to adopt regula-

tions more stringent than EPA's. (397)

February 2, 1989

Reilly succeeds Ice Thomas as EPA'S top administrator. Reilly is per-

ceived as an ''environmentalist'' an asset to President Bush, largely be-

cause of his experience as president of the Conservation Foundation. (400)

March 1989

WMI officials James Banks and Jack Schramm tell attendees at a hazard-

ous waste conference sponsored by the EPA that WMI is lobbying the

EPA to crack down on North Carolina. 4665)

March 16, 1989

Reilly meets with Dean Buntrock, Chief Executive Officer of WMI, at a

meeting arranged by Jay Hair, President of the National Wildlife Federa-

tion and an old friend of Reilly. (400) Bedrock is accompanied by Walter

Barber, Philip Rooney, and James Range, other high ranking <1 offi-

cials. Prior to the meeting, Hair invited Reilly by sending him a note

which said: ''Bi1l-Jat all possible I would like to arrange a breakfast

meeting with you, Dean Buntrock (CI1i=+CEO, WMI, and member of

NWF Board) and myself to discuss national implication of above situation

and for you to get to know Dean better.'' (453) The note referred to an at-

tached article concerning South Carolina's decision to restrict waste im-

ports based on North Carolina's law cutting down on the quantities of

waste domed into state rivers and streams.

cl's beefing paper, prepared for the meeting, urges Reilly to end the

EPA'S ''apparent acquiescence'' in the North Carolina case. It describes

North Carolina as ''the first visible domino'' in a ''full-tilt stampede of

states that are disavowing facility development.'' (401) The next domino

was South Carolina's move to restrict interstate shipment of waste that

tripped office third domino: the Alabama legislature's consideration of

measures to prevent waste imports into Alabama-which directly

page 124

waste dumped into state rivers and streams.

cl's brieEng pair, prepared for the meeting, urges Reilly to end the

EPA'S ''apparent acquiescence'' in the North Carolina case. It desçribes

North Carolina as ''the first visible domino'' in a ''full-tilt stampede of

states Ethat are) disallowing facet development'' (401) The next domino

was South Carolina's cove to respect interstate shipment of waste that

tripped Lethe third domino: the Alabama legislature's consideration of

measures to prevent waste smarts into Alabama-which directly

threatens Cgs smells, Alabama, facility. The pamr concluded by

asking hilly to '*eephatically restate EEPA) opposition to these state ac-

tions'' by threatening to withdraw North Carolina's authority to legislate

hazardous waste policy. (401)

an a letter to She Executive Director of the South Carolina Wildlife

Federation (who questioned why he convened the meeting without invit-

ing her), Hair clams the! did not intend to discuss special state issues

and that the North Carolina situation was never mentioned. Hair says

they conducted an informal discussion of ''generic'' issues, such as the

need for the federal government to require receded paler in order to cre-

ate a ''market'' for recycled paper products and the national implications

of a possible ban on the interstate shipment of hazardous waste. (606)

Har and NWF support the view that states that produce hazardous

wastes ''have the absolute responsibility to dispose of them in a manner

that complies fully with existing state and federal laws. Preferably, this

would be conducted at facilities within the particular state'' (606)

March 31, 1989

Hugh Kaufman and Miriam Sanjour of the EPA'S Once of Sold Waste

and emergency response warn William hilly against reversing the pre-

vious EPA administrator decision to drop proceedings against North

Carolina, citing the ''Bumpers Amendment' to RCRA, which allows states

to legislate their own hazardous waste policies. (398)

April 20, 1989

Without any apparent rationale, EPA officially announces the resumption

of the North Carolina hearings. The annou-cement ''attempts to deceive

the public by pretending it La review of this policy completed b! Lee

Thomas) never happened or has no bearing on the hearing...th.s decep-

tion was intentional since 1. Tidwell EPA Administrator for legion

Fomi and his subordinates in (EPA) flexion Four have repeatedly voiced

their opposition to the EPA policy published in December, 1988,'' write

Kaufman and Sanjour. (396)

April 21, 1989

In an interview with Jon Healy of the Winston-Salem Journal, hilly ex-

presses surprise that Hair has voiced opposition to EPA'S resumption of

the North Carolina hearings. Lilly says, Vay Hair hosted the (March 16

breakfast meeting with Buntrock) at which I was lobbied to do the very

thing that we are doing.'' (449)

May 11, 1989

C.W. Kitto, CWM's general manager at its Carlyss hazardous waste treat-

Management facility in Sulphur, Louisiana, writes to EPA Region W Ad-

ministrator Greer Tzdwell that CWM ''applauds your recent decision to

proceed with the hearing to examine the consistency of North Carolina's

legislation with RCL =4. to withdraw that state's LRCRA) program

page 125

authorization if warranted.'' (402)

May 17, 1989

William Sanjour and Hugh Kaufman of the EPA'S Office of Solid Waste

and Emergency Response ale charges of ethical misconduct against Reilly

and charges of criminal violations against EPA legion IV Administrator

Greer C. Tidwell with the EPA Inspector General John Martin. (397) The

whistleblowers point out that no memo stating the reasons for the rever-

sal in EPA policy in relation to North Carolina exists and that no review

took place. ''on the contrary, what we have found would seem to indicate

that the hearings were re-opened because the Administrator was lobbied

and that the existence of an EPA policy which disallowed that action was

ignored and misrepresented....We don't know whether Mr. Billy was in-

tentionally trying to deceive the public (as we believe Mr. Tidwell was) or

if he was just unaware of EPA policy.'' (3974

In reference to Buntrock's role, Kaufman and Sanjour add that he ''was

one of the largest corporate contributors to the Conservation Foundation

which Mr. Rezll! had just left as President...'' Billy also had a breakfast

meeting with William Ruckelshaus, the CEO of Browning-Ferris In-

dustries, Inc., on April 17, 1988. Ruckelshaus is also a member of the

board of directors of the Conservation Foundation. ''WMI and BFI...have

a strong and abiding vested interest in overthrowing the North Carolina

statute. They are weary of dealing with local citizens and they want to

send a message to other states that have passed or are contemplating

passing similar legislation, which may retard the growth of (her in-

dustry!, that they cannot beat 'city hall' or the hazardous waste manage-

Management industry.'' (396)

May 19, 1989

Reilly meets with Inspector General John Martin and Assistant Inspector

General John Baden. Later, Martin tells Jon Healy he cannot recall if

Sanjour and Kaufman's charges were discussed at the meeting. Barden

instructs James Johnson, divisional inspector general for investigations,

to open a preliminary inquiry into the charges. Barden tells Johnson that

the inquiry's ''investigative plan Eisd based on staff discussions with OA.''

EPA'S directory identities the acronym ''OA'' as ''office of the Ad-

ministrator,'' which implies that Billy has a hand in the investigation of

himself. EPA officials later claim that Baden's uke refers to the ''O<ce of

the Auditx'' (400, 451. 454)

August 23, 1989

Johnson files a report clearing Reilly of the ethics charges. Despite the

report's numerous contradictions, Johnson closes the inquiry ''because no

evidence was found to support the complainant's allegations.'' Johnson

reports that Jim Range, the WMI official who prepared the briefing paper

for the March 16 meeting, denied that Reilly was lobbied to pursue the

North Carolina proceedings. (448, 450)

September 28, 1989

Hugh Kaufman and William Saujour, officials of EPA'S Office of Solid

Waste and Emergency espouse, charge that the Inspector General's of-

fice rigged the outcome of the inquiry to clear Reilly of the allegations

they rased on May 17. (448) '

October 18, 1989

Richard Wagner, harden's special assistant, sends a memo to the House

page 126

Energy and Commerce Committee's Subcommittee on Oversight and In-

vestigations corroborating and expanding upon Sanjour and Kaufman's

September 28 charges. Wagner alleges that Johnson's investigation ''ap-

pears to have violated many professional and EPA standards ...lacked in-

.C

decadence, did not resolve the allegations cagiest ài11y1... and should

not have been closed.

Wagner's review reveals that Lilly may have directed his own inves-

tigation and that officials from WMI lied to the investigators about the

company' s position on the North Carolina hearings. Wagner mints out

that James Banks' assertion that <1 had no interest in RCRA proceed-

ings in North Carolina is contradicted by the company's own position

paper. (451)

Wagner also notes that the investigators accepted without corrobora-

tion Ilexllf s statements about WMX contributions to the Conservation

Foundation while he was the foundation's president. (Between 1987 and

1988, the Conservation Foundation received at least $35,000 in grants

from RI.? (451) ''Ax independent investigator might have asked

why...this particular waste management firm is contributing. This is an

issue implicitly raised but not resolved....The investigation does not ap-

pear to have pursued the issue of Mrs contribution as a possible in-

fluence upon Administrator Reilly's judgment, and no one except

Administrator hilly himself appears to have been interviewed concern.-

ing this matter'' (451)

December 1989

CWM intends on bidding for a contract to build an incinerator and landfill

complex in North Carolina, according to their southeast regional manager

Thomas N-1. The plant was authorized by a special session of the legisla-

ture in order to get the state of the Alabama blacklist of states barred

from sending wastes to the CWM Emelle land-landfill because they do not

have their own waste facilities. (552)

December 7, 1989

The House Energy and Commerce Committee's Subcommittee on Over-

sight and Investigations announces it has opened an investigation into

the EPA'S Once of Inspector Genera, citing its ''questionable investiga-

tive practices,'' among other allegations. The congressional investigation,

while preliminary in nature, covers the North Carolina matte. (399)

Two key members of the subcommittee receive money from ars Politi-

cal Action Committee between JMU,S 1989 and March 30, 1990: John

Dingell (D-M1J-$1,000; and Joseph Bhley (RJA)-$300. (399,409, 653)

(See Appendix 1.)

May 2, 1990

EPA announces that it has abandoned its attempt to revoke North

Carolina's authority to regulate hazardous waste The decision (which

had been delegated to EPA'S San Francisco once because of the perceived

partiality of EPA'S southern regional administrator to the waste disposal

industry) is hailed by environmentalists as restoring the right of states to

adopt environmental laws more stringent than federal standards. (699)

page 127

ANTITRUST HISTORY OF WASTE MANAGEMENT, INC.

Large garbage conglomerates have historically used their economic power

to destroy small competitor and monopolize the market in targeted

areas. They often establish an ''understanding'' with other large firms to

avoid competition and bleed their customers by charging inflated rates

above competitive levels. The net effects are removal of essential com-

munity services from leal control, reduced opportunities for local busi-

nesses, inflated costs of waste disposal for homeowners and local

businesses, and reinforcement that there is nothing you can do to fight

city hall. Now the ''titans of trash'' are in a position to not only squeeze

out the small haulers, but also to hold the general public hostage to the inf

alated costs of their services.

of il-

In many instances cl's growth has come about through the use

legal corporate practices such as bribery, predatory pricing, price-fixing,

and bid-egging. Bribery means illegal payoffs to public officials to secure

their support for particular viewpoints or programs. Predatory pricing oc-

curs when a company charges a price below its cost in order to drive com-

petitors out of business. Once that occurs, the company is free to raise

prices. Price-fixing and bid-rigging imply collusion between two or more

companies to avoid competing with each other; another form of this is

called ''customer allocation'' in which arms agree not to compete against

each other for customers.

Since 1985, WMI subsidiaries and employees have been convicted of an-

titrust charges on four occasions and pleaded ''no contest'' on four other oc-

casions. The company and its subsidiaries have paid at least $28 million

in penalties and settlements in antitrust cases since 1980.

<1 is correct when it says the parent company and its executives

have never been found liable for civil or criminal charges. Corporate of-

ficers and parent companies are rarely held accountable for their

employees' or subsidiaries' actions because of the complex ways courts

dele corporate responsibility and the ability of big companies to avoid

responsibility for corporate crimes by hiding behind a veil of subsidiaries.

With its legal manpower and political influence, WMI has successfully

defected the blame for charges of corruption involving their subsidiaries

even though the charges are routine and ongoing. This situation makes

each Lew antitrust settlement merely the cost of doing business. As one

investment analyst puts it, ''in the past, price fixing suits have caused

some concerns, but investors have come to appreciate their financial im-

materiality.'' (7554 Air yea's of antitrust violations and monopolism,

'its ''sheer size and breadth insulate the bottom line from short-term

problems that do occur in individual components of the business.'' (755)

This pattern of denial doesn't make the victims of exploitation any more

comfortable and should not let WMI off the hook. Nor should it make

those knowledgeable about the history of corrupt practices any less

vigilant. If the repetitive nature of cl's corrupt practices is local in na-

ture, how much control does the parent company have? Is it an empire

out of bounds?

Yet there is enough evidence to see through the company's illogical

defense that each antitrust violation is an isolated incident without con-

nection to top corporate officials. For instance, plaintiffs in a national

page 128

class action lawsuit filed in the U.S. District Court for the Eastern Dis-

trict of Pennsylvania alleged that <1 and BFI have demonstrated a

''pattern of anticompetitive conduct throughout the United States which

cannot be sheer coincidence. Moreover, defendants' national and regional

owners engineered, encouraged and directed that conduct.'' (740) During

sworn depositions, plaintiffs m the lawsuit described specific instances

when senior executives of the two companies met to exchange pricing

Hans, instances where senior executives orchestrated price-fixing ac-

tivities in local areas, and instances where leanly active conspirators

were dealt with by promotion or other rewards. (740) WMI settled its part

in the case for $19.5 million. (760 The U.S. Department of Justice has

failed to begin a criminal prosecution of the large waste companies, includ-

ing WMI, even though the sworn testimony in this case seems to indicate

that the companies are acting as an illegal cartel.

The pubic did not have the opportunity to understand the full implica-

tions of the national class action case because it was settled out of court

before going to trial. Placed in the context of the evolution of the industry,

the implications of the case become dear: rather than acing as tradition-

al corporations in a competitive free market, the evidence seems to sug-

gest that WMI, BH, and other waste disposal companies are operating as

an illegal cartel that is forcing more and more communities to suffer the

economic and environmental consequences of how they conduct business.

It is im octant to understand that environmental and economic issues

P

are inestimably tied together when it comes to addressing the nature of

the waste disposal industry. The growth of the industry in the 1980s

came about in part as a result of a relaxed regulatory climate in the area

of antitrust laws combined with increasingly strict pollution control laws

(rather than tonics use reduction and other kinds of pollution prevention

laws). Newer, more complex pollution control laws have helped the large

multinationals grow even larger because the laws made it difficult for

competitors to survive. At the same time new pollution control policies

contuse to support the myth that disposal can be made safe with new

''state-of-the-art'' technology. This myth prevents public officials,

regulatory agencies, and the public from addressing the causes of waste

generation.

Focus on tougher new handful requirements, for instance, has created

increased capitalization requirements that squeeze out smaller companies

and publicly owned facilities. The result hag been increased monopo-

lization over disposal capacity, loss of local control, and continued environ-

mental damage. The revenue generated by the large waste disposal

companies can be recirculated into the poetical process to fight legislation

that undermines their interests (laws that would reduce the amount of

waste created to begin with provide for local control over disposal facility

siting decisions, or exclude companies with a history of felony convictions).

Because of their history of antitrust, WMI and its subsidiaries have

faced potential bans from eligibility in bidding on new contracts in several

cities and states. There are many federal, state, and local laws prohibiting;

governments from hiring or contracting with convicted criminals. The

laws (also called ''bad boy laws'') allow a company to be barred from receiv-

page 129

ing government contracts when the company has a record of repeated

violations. Unfortunately, however, these debarment laws and other laws

such as the Small Business Protection Act are rarely enforced.

There are a number of reasons for lack of enforcement of debarment

laws. Many regulators and environmental groups simply do not pursue

debarment because they do not see the connection between corporate

crime and environmental compliance. Also, ''white collar criminals'' are

treated more leniently than run of the mill street criminals. This may in

turn 1- partly due to the fact that many regulators look to private in-

dusty for lucrative career moves. (Sue Appendix L, which lists WMI ex-

executives who have passed through the ''revolving door') The Laws are also

riddled with loopholes that leave enforcement up to the discretion of

regulator. The laws are rarely mandatory and are usually only enforced

if the company has been convicted rather than if they entered into con-

sent decrees where they neither admit nor deny guilt. Many of the laws

(e.g., those in MD PA, MN, and NJ) state that companies can be debarred

for crimes of subsidiaries and related business. Others don t carry that

provision. Citizens should push for enactment and enforcement of tight

debarment laws from the local level on up. (669)

Several community groups in Florida, California, North Carolina,

Texas, and Missouri are now using ''bad boy'' laws as a strategy to force

loci governments to stop doing business with companies that have

criminal track records. B pushing such a strategy, leal groups open the

!

issue to wider community meekest, people who may not care about the en-

vironment but who care about how their taxes are spent and who their

community does business with. An Palmer/Ware, Massachusetts, the

Ware River Preservation Society (WRPS) fought for and won a local or-

dinance banning town contracts with criminal corporations. The group

was actively opposing a <1 landfill and by pushed for the local or-

dinance, WRPS forced local officials and the news media to examine the

darker side of WMI, which had hyped its image as a recycles in a glossy

media campaign. After the ordinance was passed, WMI pulled out and

canceled its proposed 1=511. The lesson here is that even though cor-

porate criminals may not be punished or debarred from doing business by

federal agencies, leal communities can and should push forlorn prohibi-

tions.

Law and environmental enforcement officials also have yet to inves-

tigate whether antitrust activity easts in specialized waste services such

as radioactive waste disposal (where WMI subsidiary Chem-Nuclear Sys-

tems, Inc. and BFI subsidiary U.S. Ecology control most of the low-level

radioactive waste dumps).

Given the size and variety of services covered by the waste industry con-

glomerates, examination of antitrust issues needs to occur not just within

particular areas in which companies such as WMI operate, such as the na-

tiomal garbage disposal market, but across the board in services where the

major disposal companies are involved to see 'trade-offs are made that

disguise non-competitive agreements as strategies for service diversifica-

tion.

The breadth of WMI's empire mandates that antitrust laws also need

page 130

enforcement on an international level. As with the international trade of

hazardous waste, countries and international treaty conventions should

work to block imports of dirty technologies and companies with a history

of antitrust and environmental violations.

What follows is a partial chronology of Mrs antitrust history.

1961

The future chairman of WMI, Dean Bedrock, is sued by the state of Wis-

consin for being involved in a ''conspiracy to restrain trade, to willfully in-

jure the business of other, to hinder other from performing lawful Acts,

and an attempt to monopolize the rubbish collection, waste removal or dis-

posal business in and around Milwaukee County.'' (146)

This charge goes back to the early days before there was a company

named ''Waste Management, 1nc.'' Dean Buntrock owns Ace Scavenger

Cc., one of 11 trash-hauling businesses in the Milwaukee area whose

owners are jointly accused of having ''notoriously, continuously and inten-

tionally tlreatened physical harm to the owners of competing rubbish

collection, waste removal and disposal firms, corporations or persons

engaged in said business and their families and destruction or damage to

their property and equipment, or threatened to haul all their accounts for

nothing if they covered or submitted competitive bids to accounts handled

by the defendants....Further that they tried such threats to mysterious

fares and ants of vandalism by unknown persons which resulted in

damage to the trucks and other property of such com/titers.'' The Mil

waukee County Circuit Court judge in the case entered a temporary in-

junction against the practices which stood for eight years beginning in

1962. The charges are dismissed in 1970, after Ace and many of the other

accused garbage arms became subsidiaries of the recently formed Waste

Management, Inc. (J46)

1968

WMI is formed when Chicago hauler Dean Buntrock joins Atlas Refuse

Disposal, enc. with H. Wayne Huizenga's Southern Sanitation Service of

Fort Lauderdale, Florida, and adds a third company, Acme Disposal Com-

pany of Chicago. Huizenga is a descendent of the founder of Chicago's

first garbage-hauling company, which was established in 1894. (134, 439)

1971

WMI subsidiaries in Chicago are among members of a Chicago trade as-

sociation called Chicago Infuse Corp., which is sued for price-fixing,

market allocation, and harassing competitors. One of the arms, Ace

Scavenger Service, is owned by Dean Buntrock. Atlas Disposal is also im-

plicated. The association pays $50,000 to settle the suit in a consent

decree that neither admits nor denies guilt. According to the complaint,

the conspiracy began in 1965. (269, 314, 439)

1971

WMI is converted from a privately held to a publicly traded corporation.

By late 1972, WMI issues 3,J46,137 common shares, many of which are

traded for acquisition of new subsidiaries. (439)

1975

WMI subsidiary, City Disposal Co. of Madison, Wisconsin., is found guilty

of attempting to fix prices with its competitors in November of 1972. (182,

4724 WMI is hed $4,000 by a circuit judge after filing 171 after-trial mo-

tions. The decision is eventually upheld by the Wisconsin Supreme

page 131

Court. Harold Crooks retorts in Dirty Business that the state succeeded

four years later in extraAtmg a former WMI manager from neighboring

Illinois to face charges. The manager was tried and fined. ''They are a

tough outfit'' commented one knowledgeable government source. ''They

fight very, very he-a.'' (439)

1976

A class actin' n suit is filed in the state of Arizona alleging civil antitrust

law violations by Universal Waste Control, a Phoenix, Arizona, WMI sub-

sidiary. The charge includes conspiracy to fm prices, to allocate customers

(i.e., carve out market territory), and to monopolize the waste disposal

business in Phoenix through acquisition, predatory pricing, and hidden

understandings. The <1 subsidiary later enters into a consent judge-

Management with the state attorney general. The subsidiary and Joseph Limos-

ki, Universal's general manager, agree to pay $15,000 and $2,500,

respectively, to the state of Arizona and to refrain from making further ac-

quisitions for five years. (456)

WMI later pals $195,000 to a competing hauler in Phoenix, Arizona, to

settle related cml charges about monopolistic practices. (95, 439)

1977

WMI makes an unsuccessful bid for SCA then the third largest garbage

hauler in the U.S. (439)

1979

The Illinois State Attorney General's once opens an investigation into

cl's monopoly activities. The antitrust division receives a number of

calks from rivals claiming that WMI charged discriminatory prices to unaf-

filiated haulers for the use of its dump sites. No immediate suit is bed as

a result of the investigation. (439, 456) '

December 1980

WMX bids to take over EMW Ventures, Inc., then the fourth largest waste

disposal company in the U.S., and its subsidiary, Waste Resources Corp.

A cavil antitrust suit, axled to prohibit the acquisition, contends that the

newly merged outfit would create an oligopoly in Dallas and Houston.

The restraining order is denied and, in February 1981, WMI acquires

EMW Ventures/Waste Resources for 957,3J2 common shares in WMI.

(198, 439)

own landfill and did not use or pay for county services.'' (268)

1981

WMI unsuccessfully attempts to take over Rollins Environmental Ser-

vices, Inc. If WMI had bought out Allies, it would have controlled nearly

90 percent of the U.S.'S off-site hazardous waste incineration industry and

nearly 40 percent of the hazardous waste disposal capacity in the United

States. (197, 198, 439)

1981

According to the U.S. Department of Justice, it's southern Florida sub-

sidiary, United Sanitation Services, ''used Dade County's increased damp-

ing fee at the county landfill as an excuse to raise its prices to its

customers-some by as much as 300 percent oven though United had its

October 1982

WMI takes over Chem-Nuclear Systems, loc., a leading radioactive waste-

hauling and disposal company. (199) Another Chicago-based hauler, Mr.

Frank, Inc., launches a private antitrust suit in response to the acquisi-

tion. The complaint claims that <1 ''has forced or attempted to force

page 132

major generators (of liquid fastest to enter into 'national contracts' for

the disposal of wastes before Waste Management would dispose of any of

their waste at all. Since certain of their wastes had to be disused of by

Waste Management, there was great pressure to sign the national con-

tracts.'' (439)

WMI agrees in 1986 to pay $750,000 to settle the suit. WMI also

guarantees Mr. Frank $750,000 a year in business over a four-year

period. (314)

March 1983

WMI's wholly owned subsidiary, Georgia Waste Systems, Inc., is con-

victed of conspiring to flux prices. WMI is fined $350,000. The firm's

former general manager, Raymond Dingle, is also found guilty and is sen-

tenced to a one-year jail term, with all but 45 days suspended. (95) Ail con,

dictions under the Atlanta indictment are sustained unn appeal. <1

states that the! did not dismiss Dinkle air his conviction because they

remained convinced of his innocence. %72, 4824 WMI also settles a re-

lated civil class action suit in 1985 arising from the criminal case by

pang $525,000. (482)

According to the indictment, an. agreemen.t existed among Georgia

Waste Systems, Inc., Browning-Ferns Industries and SCA since 1974.

The companies were charged with not competing for each other's busi-

ness, discouraging established customer from changing contracts by

means of intentionally high bids or quotations, and using identical price

lists for certain potential customers. (439)

As reported b! the W% Lauderdale News/sun-sentinel, according to a

1981FBI memo, legal activities at Georgia Waste Systems ''were probab-

ly directed by corporate officials at rill company headquarters,'' though

the parent corporation and senior executives were never charged with an-

titrust violations. (269, 482)

The paper adds that, according to the U.S. Dept. of Justice, WMI

workers in South Florida ''celebrated'' the light sentence, which allegedly

spurred them to continue similar practices in Florida. (269)

September 12, 1984

WMI acquires SCA Services, the nation's third largest waste disposal com-

pany. The Department of Justice forces WMI divestiture of nearly one-

third of its SCA holdings. After acquisition by Waste Management

Acquiring Corporation (WMAO, the divested holdings are either trans-

ferred So the Instar Corporation (a Corporate relative of GSX, the haz-

ardous waste management company) or set up to be independent

operations temporarily maintained by a trustee. (559)

March 27, 1985

A Jack Anderson column in the Washington cost cites U.S. Maritime Ad-

ministration complaints that EPA desperately discourages competition in

the ocean incineration industry by favoring CWM over all others. (55)

May 1, 1985

WMI subsidiary Georgia Waste Systems, along with three other waste dis-

posal companies, agrees to pa! total unities of $130,000 to settle a 1984

Department of Justice civil suet alleging price-fixing of waste removal con-

tracts for federal facilities in the Atlanta area. 6141)

March 14, 1986

John Horak, general manager of HOD disposal, a subsidiary of Waste

page 133

Management headquartered in Antioch, IL, is sentenced to six months in

prison following his conviction for paying $12,000 in bribes to suburban

Fox Lake officials so that the village garbage collection contract with

HOD would 1- renewed. Horak was also bed $25,000 and placed on

probation for 5 years. The contract was worth $700,000 per year to HOD.

hor-later clads that he was told the bribe had the approval of James

DeBar, president of WMI of Illinois and vice president of =1, the

arent corporation. Horak told U.S. District Judge Charles Norgle and a

P .. ,

Jury that DeBœr, in approving the payment, had said, It s done every

day.'' (26, 119)

March 27, 1986

Okaloosa Sanitation files suit against the mayor and commissioners of

Shammy, Florida, over Shalimar's contract with Environmental Waste

Systems (EWSX a wholly owned WMI subsidiary. Although Okaloosa

Sanitation was the lowest bidder, Shalimar awarded EWS a garbage cob

section franchise. The family of Shalimafs mayor, Bart Hudson, sold a

sanitation inn to 'WS in 1984; in turn EWS was sold to <1. Although

C

Hudson had Sled a memorandum of voting convict with the town clerk m

November 1985, he later denied any conflict-of-interest. The Okaloosa

suit is eventually dropped, and Okalusa is sold to EWS. Bart Hudson

late ands employment with 'WS while still the mayor of Shalimar. (109,

110, 681)

April 1986

Five former employees of Laidlaw Waste Systems, Inc., the third largest

waste disposal arm, charge in interviews the a Columbus, Ohio,

newspaper that local Laidlaw company managers instructed them to

steer clear of Mrs customers and to quote inflated prices if Mrs cus-

tomers sought business with Laidlaw. The Ohio Attorney General inves-

tigates the charges, but no antitrust suit is filed as a result of the

investigations. (3A6, 317)

April 1986

David Hapengardner, manager of 'its Florida subsidiary, United

Sanitation Services, is sentenced to two years probation and is penalized

$10,500 for price-fixing and customer allocation. The Department of Jus-

tice claims that as a result of the conspiracy between Hoopengardner and

others, the public paid higher, noncompetitive prices for trash services

and was unable to receive competitive bids for waste disposal. In August

1986, wmi; transfers Hoopengardner to its Caracas, Venezuela, sub-

sidiary. Hoopengardner thereby is able to avoid having to report to proba-

tion officials. following completion of later prosecutions in Florida, <1

dismisses Hepengardner. (269, 482)

June 29, 1986

The Chicago Tribune reports that after efforts by the city of Chicago to

abandon contracts with WMI, city officials learned that ''the company's

control of the industry is so pervasive that it might earn more money from

the city than it ever dad, because other companies that want to compete in

the trash-hauling field often find they have no alternatives to using

landfalls and equipment controlled by Waste Management...'l has a

strangle hold on the municipal trash-hauling business (in Chicago) a

dominance so great that Chicago cannot dispose of its garbage without

the company's trucks, drivers or dumps even when the contracts go to

page 134

other companies.'' WMI is contracted to handle about 80 percent of the

city's unburned trash. (123, 162)

September 18, 1986

A Cook County, Illinois, judge rules that former Chicago Mayor Jane

Byrne illegally extended garbage contracts to WMI in 1982 and 1983 to

haul trash from transfer stations to land-fills. The city twice extended a

waste-hauling contract to WMI worth $2.3 million per year without open-

ing the contract to outside bids, in violation of Illinois competitive bidding

laws. (194a, 196a)

Late 1986

Lewis Goodman,, chief operating officer of WMI subsidiary United

Sanitary Services of south Florida is convicted on antitrust charges.

Federal prosecutors charge that Goodman was the ''chief architect'' of a

conspiracy designed to control waste handling in Dade and Broward Coun-

ties in south Florida. Specifically, the government charges Goodman with

price-fixing, market allocation, and bid-rigging between 1971 (soon after

WMI is formed) and 1985. Additionally, Goodman was charged with

obstruction of justice by removing documents from company files that had

been subpoenaed by a grand jury and altering other documents so that

certain, words would be obliterated when the! were submitted, to the

grand jury. Goodman is convicted after trial m December 1986. The Cir-

cuit Court of Appeals ultimately reveres the conviction and remands the

case for retrial. Goodman pleads nolo contendere prior to retrial, receives

a $200,000 fine, and is sentenced to a short period of condiment in a

Community Treatment Center, along with three years of probation. (167,

211, 264)

1987

As of 1987, according to the research group Pind/svp, WMI and Brown-

ing-Ferris together control 47 percent of the U.S.'S waste-hauling market.

The U.S. Department of Justice records show that federal prosecutors

have received dozens of complaints from small haulers around the

country claiming that WMI and Browning-Ferris are driving them out of

business. The Justice Department claims they don't have a large enough

start challenge most of Mrs merger proposals. 6269, 407)

February - March 1987

Chemlawn Corp. successfully fights a hostile WMI takeover bid. At a

hearing before Judge James J. Graham of the Southern District of Ohio

Mark Cherno, Chemlawn's lawyer, enters this statement into the record

based on sworn depositions from WMI executives:

They (WMI executives) bought 45,000 shares of stock for themselves.

As far as we can calculate, these people..will make $800,000....WMI

shareholders will be paying into WMI officials' pikers. Buntrock himself

admitted he would make about $350,000 in profits by this scam....Your

honor, they are so raw in contempt for authority, it is hard to believe it

took place.

The Chemlawn attorney refers to two memos between Buntrock and

James Koenig, vice president and treasurer of WMI, on the subject of pos-

sible acquisition. Koenig and Buntrock both acquired shares in Chem-

Lawn before putting Chemlawn on the agenda for the Board as an

acquisition candidate. (496)

Concluding after an internal investigation that the executives were

page 135

simply sharp investor, a company committee comprised of three outside

directors later asks a Delaware Chancery Court to dismiss the

shareholder suit. (445) WMI executives sold their Chemlawn holdings for

a combined profit of close to $1 million. (445)

March 1987

A civil suit brought by Applied Technology of Pennsylvania before a

federal court in Philadelphia charges CWM with attempting to monody

lize the hazardous waste-hauling business in the Northeast. The suit was

settled for $85,000. (482)

June 4, 1987

The Wall Street Journal reports that at least seven federal grand juries

are investigating possible antitrust violations by WMI in Florida,

Alabama, Tennessee, Ohio, Arizona, and California. Among the possible

criminal violations being investigated: price-fag, bid-rigging, and ab

locating customers and territories. (211)

June 9, 1987

A WMI subsidiary and two other waste disposal companies are indicted

by the IA Angeles District Attorney's once after an fills-month Ios An-

geles county antitrust investigation. Ira diner, the Los Angeles District

Attorney. says the companies totted to divide customers ''among them-

selves, eliminating the competition and raising prices to artificially high

levels.'' Prosecutors call the investigation ''the largest criminal antitrust

case in California history'' Also charged are Wiley Scott, a WMI official,

and Clicord Chamblee, a former WMI official. Reiner threatens to invoke

a rarely used state antitrust law to ask a judge to revoke the arm's cor-

porate charter. Three civil antitrust cases against WMI of California arise

from the criminal prosecutions. See March 16, 1989, entry below for more

information. (212, 213, 407, 482, 537)

October 1987

A class action lawsuit filed in the U.S. District Court in Philadelphia by

waste hauler customers, including Cumberland Farms, Inc.., charges WMI

and Browning-Fends with a massive nationwide price-fixing conspiracy

dating from 1978. Justice Bechtle of the U.S. District Court for the East-

ern District of Pennsylvania late rules that the case may be maintained

as a class action suit. Therefore, stated Joseph Kohn, one of the attorneys

representing the plaintiff, the suit will represent hundreds of thousands

of other alleged victims nationwide. (306) (Sue July 27, 1990, entry.)

October 19, 1987

The Chicago Sun-Times reports that the president of Waste Management

of Illinois, James DeBoer, was ''under scutiny b! a grand jury as part of a

nationwide (Department of Justice) investigation of alleged corruption by

garbage-hauling companies.'' (299) Earlier, federal investigators were told

by Raymond Akers, Jr., a former company lobbyist who pleaded guilty to

charges stemming from a $10,000 bribe to Alderman Clifford Kelly (20th)

of the city of Chicago, that the bribes were given with the approval of De-

Boer. (11$ DeBoer is also a vice president of WMI, the parent company.

No charges are ever brought against DeBer.

Alderman Kelly pleaded 'guilt earlier to four counts of mail fraud and

one count of failing to file a 1985 income tax form in return for

prosecutors dropped charges of extortion and various tax violations. (166)

Other gifts from Akers to city officials included a $4,000 week-long

page 136

vacation in Mexico for former City Corporation Counsel James

Montgomery and his family. ''Top comply officials'' also approved other

trips and Ws including expensive cots of meat, trips on the company's

plane, and an electric typewriter. (122)

October 29, 1987

Subsidiaries of WMI and Browning-Ferris plead guilty in a federal

criminal antitrust case in Ohio. WMI and BFI are fined $1,000,000 each

for conspiring to fix prices and allocate customers in the Toledo area

during 1981 and 1982. WMI fires two employees of its WMI of Toledo sub-

sidiary over the incident: Richard Evenhouse, a former District Manager,

and Jack Nichols, a former District Marketing Manager. The state of

Ohio later enacts a law requiring background criminal checks on ap-

plicants for waste disposal permits. (230, 482)

November 2, 1987

WMI pays $51,000 to settle a civil suit filed in the Superior Court of

Sonoma County by Industrial Carting of California for alleged below-cost

bidding. (482)

1988

WMI's New York subsidiary, Bestway Disposal Coax, enters a no contest

plea in the U.S. District Court, West District of New York Rochester), to

criminal charges of conspiring to unreasonably restrain interstate and

foreign trade and commerce. <1 had acquired Bestway in 1984. The

charges covered a period from the late 1970s through at least late 1984.

Bestway is âned $250,000. Bestway subsequently moves to have the

court suspend imposition of the sentence based on the acquittal of co-

defendants. The court denies Bestway's s motion. (472, 482) Bestway also

later pals $100,000 to settle a civil class action suit feed by Bestway cus-

tomers m U.S. District Court in January 1987. (725)

%1 of Florida settles a class action civil antitrust suit fled by Carefree

David Travel Co. for $1.2 million.. (4824

1988

Francis Cone, a former WMI of Missouri, Inc. employee, sues WMI for

wrongful termination of employment. Cone charges <1 of Missouri with

conspiring with other waste disposal companies to allocate customers and

fix puces. Cone charges that <1 ired her because she threatened to dis-

dose the conspiracy and refused to participate in anticompetitive ac-

tivities. The Department of Justice impanels a grand jury to hear

testimony and investigate allegations of antitrust violations by WMI and

others in the Kansas City area. (482)

January 12, 1988

Mrs Florida subsidiary United Sanitation Services agrees to pa!

$725,000 for damages and penalties related to charges of price-'mg and

rigging bids for government contracts in Dade County, Florida. The set-

tlement covers two civil antitrust cases stemming from criminal prosecu-

tion for similar charges. Federal prosecutors say the scheme was

''fmancially devastating'' to United Sanitation's customers, costing them

millions of dollars between 1982 and 1984. <1 customers say the

hauler basted their fees as much as sixfold in three years. (228, 292, 294,

650)

page 137

January 15, 1988

WMI of Florida pleads no contest and is bed $1,000,000 for criminal au-

titrust activities m Broward and Dade Counties, Florida. The alleys con-

spiracy allegedly had the following offers: prices were axed at artificially

high and noncompetitive levels; competition for waste disposal services

was restrained; customers were restocked to doing business with specific

disposal service companies in those two counties. These activities cost con-

sumers millions of dollars. Criminal fines ''mount to little more than a

licensing fee,'' one New Jersey state Assistant Attorney General com-

ments in an interview with the Fort-Lauderdale Sun-sentinel. ''The deter-

rent is not that great.'' acorns in the case reportedly alleged that <1

and other haulers ''have carted o'more than $2.5 million m the past ten

years through overcharges and other suspect billings'' in the two Florida

counties. Homeowners m Broward's unincorporated area have seen their

trash pickup costs triple between 1980 and 1987. WMI of Florida, Inc. is

not barred from doing business in Florida as a result of this no-contest

plea. The conspiracy lagan before WMI acquired the local company in

1980, and continued for years thereafter. %1 fires two employees over

the incident. (225, 228, 264, 268, 269, 284, 292, 293, 472)

February 1988

WMI lobbies against a bilk in the Tennessee state legislature that would

prohibit the state from granting a landfill permit to any company or sub-

sidiary up to 10 percent of which was owned by a person convicted under

state or federal racketeering laws. The bill eventually fails. (287)

May 1988

A bill that would bar WMI from doing business in Florida because of

white collar crime convictions dies in a state House Governmental Opera-

tions Committee. Attorney General Bob Butterworth, who originally

proposed the legislation, is asked by Robert Kauth, an old acquaintance

and former Broward. County administrator turned lobbyist for WMI, to op-

mise the bill. Kauth tells Butte-worth, 'You'll put us out of business''

'the this bill. (65$

July 1988

Texas Attorney General Jim Mattox launches an investigation into ab

leger antitrust violations b! WMI and Browning-Ferris. The investiga-

tion is triggered by complaints from a poop of small independent trash

haulers and landfall operators in Hats County who claim that the two

companies have a jock on the industry because they own the only Type I

landfalls in the county. No action was taken as a result of the investiga-

tion. In addition, Johnson's Disposal Service Inc., a small garbage hauler,

fees a $3 million lawsuit against the two companies and severs) of their

affiliate. The case was settled before going to trial. (540)

August 15, 1988

Ohio Waste Systems, Inc., (a WMI subsidiary) and Browning-penis In.-

dustries of Ohio and Michigan settle an Ohio civil lawsuit brought be the

Attorney General's Once afore a U.S. District Court in the North Dis-

trict of Ohio on behalf of state and local government purchasers of waste

disposal services. The companies jointly pay $700,000 to settle the case

without admitting guilt. Most of the money wil1 go to 38 school districts

and other customers in the Toledo area allegedly victimized by the price-

fixing. The snit charged that beginning in 1981, <1 and Browning-Far-

page 138

ris officials met secrete! and conspired to Ex prices to gain a lock on the

trash-hauling market m Eve counties in Ohio and two counties in

Michigan. No charges are raised by the Michigan Attorney General. (482)

(Also see October 29, 1987.)

A lawsuit bled later alleges that ''perhaps the most telling endorse-

Management of the events in Toledo by the national leadership of Browning-Fer

ris and WMI was the way in which the active conspirators were dealt

with by their respective companies...(for example Bill mulligan, who was

sent by WMI to Toledo ''on special assignment'' during the period that

Yeager ra BPI employees and Evenhouse (a WMI employee) negotiated

the Ex, was later rewarded by WMI with the presidency of wmi; of

North America.'' (740)

September 1988

An attorney for a company interested in Milwaukee's (ire- shredding con-

tract accuses city o&czals of ''rigging'' the bidding process to favor <1.

The attorney says the city included specifications and a timetable in the

bidding process that would have prevented an! out-of-state company from

betting the contract. <1 is under recent pubic scrutiny because of its

ties to former city denials. Former City Sanitation Superintendent Wil

liam An Kappas resigned his post in August of 1988 to work for WMI, and

former City Development Commissioner William Drew, who resigned in

the summer of 1988, owned more than $50,000 worth of WMI stock while

serving as a city official. (539)

September 21, 1988 A class action suit produces a $2.5 million settlement to residents of Dade

and Broward Counties in Florida. The suit charges that a conspiracy had

been created to divide markets up and set artificially high rates for

municipal trash collection. The out of court settlement allows the com-

panies evolved, including a WMI subsidiary, to neither admit nor deny

liability and continue operating. (335)

October 1988

Cecil McFarland, Supervisor of Garbage Disposal in New Orleans, tells

the city council that unidentified officials of a New Orleans WMI sub-

sidiary warned him and a colleague they would wear ''cement boots'' and

''meet their maker'' if they persisted in investigating garbage disposal

overcharges. Sanitation Director Pat Koloski accuses the WMI subsidiary

of 1) billing New Orleans for disposal of garbage from other parishes; 2)

billing the city twice for the same loads of trash; and 3) weighing truck

drivers and helpers along with the trash in order to innate billing char-

ges. The prosecutor responsible for a subsequent investigation carried out

by the Justice Department later states that though he cannot comment

unn details of the investigation because of grand jury secrecy require-

ments, his once did not recommend filing criminal charges in the case.

(418, 482)

Fall 1988

WMI is investigated by the U.S. Justice Department for antitrust viola-

tions in Oregon, after Portland City Commissioner Bob Koch told. federal

officials that Douglas Ogden., a WMI general manager, tried to induce a

second company to take customers away from other Portland garbage

haulers in anticipation that WMI in turn would buy the second company

for $300,000 to $500,000 above its estimated value. The Portland

page 139

Oregonian reports that James Cozzetto, owner of Metropolitan Disposal

Corp., has been the most vocal of those complaining. ''Cozzetto claimed

that Waste Management covered to buy his company last year, then began

offering unusually low prices to many of his customers after he refused to

se1l.'' (419)

1989

Florida passes a debarment from çoverhment contracts law (S-458),

prohibiting state agencies and political subdivisions from doing business

with companies or afi!liates convicted of antitrust activities. The law ap-

plies to persons who fit this description air January 1, 1990. (412)

January 20, 1989

A suit filed b! C.C. Sanitation Cc., Inc. in Louisiana, that charges WMI

with attempted to monopolize the portable sanitation market is settled

for ''nuisance value'' of $1,000 and dismissed. (482)

February 1, 1989

WMI is banned from contracting new business with the city of Chicago be-

cause of a ''bad boy'' ordinance that prohibits the city from doing business

with companies whose officials have been convicted of bribery or bid-rig-

ging. Two months later the city council passes an amendment that has

the eject of allowing WMI to continue doing business with the city be-

cause the city cannot find another company that can provide such services

more cheaply. Later in 1989, a WMI subsidiary is awarded a three-year

contract to operate a waste transfer facility owned by the city. (325, 528)

March 16, 1989

'WMI of California pleads ''no contest'' in Ios Angeles Municipal Court to

the charge of conspiracy against trade and pays $1 million in penalties to

settle the biggest criminal antitrust case in the state's history. By plead-

ing ''no contest'' WMI avoids application of a state law barring companies

convicted of antitrust activity from doing business within the state's boun-

daries/3lg)

The suit charged that <1 of California plotted to eliminate competi-

tion and control prices in the Ios Angeles area. District Attorney Ira

Reined charges the conspiracy included agreements the company made

with other defendants to elongate competition, to not touch each others'

business, and to use below-cost ''blitzes'' to lure customers from busi-

nesses that did not go along with the plot. ''it's rare to find the smoking

gxuh'' sale assistant District Attorney Tom Papageorge, after finding ten

boxes of eternal memorandums and expense vouchers at GSX Corp.. the

company charged along with WMI ''The challenge of these cases is having

to prove a conspiracy when agreements are mostly verbal.'' (3A9, 700)

''The crime here mounts to a thee from the pubic which uses the myriad

of businesses which are paying atificially high fees to have their trash

hauled away,'' say District Attorney Ira diner. ''The high prices are ul-

timately passed along to the public'' (701)

In addition, three WMI officials, Wiley An Scott, Jr., Operations

Manager for Waste Management of Sun Valley, Ishkan Ara Grodia,

cl's Sales Manager, and Clifford Chamblee, General Manager of <1

of California's Gardena operation, also plead ''no contest'' to conspiracy

against trade. (357, 482)

March 29, 1989

A civil suit alleging that Mrs Oakland Scavenger attempted to monopo-

page 140

lize a local market is dismissed after the WMI subsidiary reaches a settle-

Management with Vinci Enterprises, the plastic (482)

April 12, 1989

A member of the Contra Costa Count! Board of Supervisors calls for the

California SQ'.G Attorney General to investigate possible conflict-of-inter-

est of Board member Phillip Beaxxtrow who is also manager of landfill

siting for Waste Management of North America, Inc. <1 owns the op-

tion on the proposed Marsh Canyon landfall site in the county, where solid

waste policy decisions are determined by the Board. (343)

December 28, 1989

Dewey's Rubbish Service, a WMI of California subsidiary, pleads guilty to

a one-count antitrust criminal charge in connection with a conspiracy to

allocate customer and Rx prices of commercial and industrial trash-haul-

ing services in Orange County, CA, beginning in early 1983 and continu-

ing through 1984. Dewey's pays $1 million to settle the case (768)

The same day Waste Management of California, Inc., doing business as

Daily Disposal Service, pleads guilty to a one-count criminal charge in con-

nectzon the a conspiracy to allocate customers and Ex prices of commer-

cial and industrial trash-hauling services in San Diego, CA, from early

1983 through /984. Daily agrees to pay $500,000 to settle the case (7694

June 29, 1988

Crabtree, Inc. files suit against WMI and the state of Colorado for a con-

spiracy to violate Minority Business Enterprise preference laws in both

federal and state courts in Colorado. (482)

1990

Residents of Palmer, Massachusetts, force their town selectmen to enact a

''bad boy'' ordinance in the face of a potential WMI landfill, electively

stalling the proposal. (669) WMI later withdraws the 1=511 proposal.

February 1990

WMI faces a hearing under a new Florida debarment law. Recent events,

such as the December 1989 guilty plea by two subsidiaries in California

could bar the company from state and local government contracts. If

placed on the restricted list, WMI would be allowed to carry opt existing

contracts and private contracts but would be barred from bedding on new

business or renewing contracts for three years. (528)

April 1990

Law enforcement officials in Bristol County, Massachusetts, unseal indict-

ments related to an illegal trash-dumping and bribery scam at the North

Attle%ro landfill, which investigators say may have milked the town of

millions in waste fees. District Attorney Ronald Pina says the ''white-cob

lar kickback scheme'' included town officials and Leo Fountaine, Jr., 45,

formerly of Waste Systems, enc., and Milton Cash, 63, owner of Cash

Landfill Corp., both of whom ran the dump until they were bought out by

WMI. close Beach of WMI also faces conspiracy and larceny charges. 6609)

July 27, 1990

Plaintiffs in a national class action suit filed against WMI and BFI allege

that ''national and regional oaters of the defendants were directly in-

volved in price-axing activities throughout the country. Indeed, there is

hard, documentary evidence that the highest ranking occurs at BH and

WMI met to exchange information regarding future pricing.'' Other allega-

tions charge that local whistle-blowing efforts were rebuked by top execu-

tives of both companies, that officials within the companies involved in

Page 141

the conspiracy were promoted rather than penalized after the companies

were charged with antitrust crimes, and that competition arising out of

leal areas such as Toledo, Ohio, was eliminated through events ''directed

at every stage be persons at the national headquarters levels of BFI and

WMI.'' The suit fills later settled for almost $50 million, with '1 paying

$19.5 million for its part of the alleged conspiracy. (740, 761)

WMI'S QUESTIONABLE ENVIRONMENTAL LIABILITY INSURANCE SITUATION

the total costs of site closure plus $50 million for natural resources

damages. WMI has no insurance coverage that meaningfully transfers the

risk of its operations to an outside party.

The WMI rebuttal to the first edition of this report claims, ''The

Company's hazardous waste facilities currently are covered by a Pollution

Legal Liability insurance policy purchased from an established insurance

company...with a separate agreement between the insured and the in-

surer requiring payments that ultimately onset claims which may be paid

under the insurance mlicy....' (555)

At that time, WMI held a policy with the National Fire Insurance Co.

('IO of New York City. Under this policy, NFIC is obligated to pay up

to $10 million for any sudden or non-sudden recurrence Inability claims.

In return, WMI must return this settlement mount, in whole, to NFIC.

Quite simply, this policy overs a loan., not liability insurance coverage

that places any risk on cl's insurers. It is self-insurance in disguise,

used to meet regulatory requirements that give the apl-dance, at least,

that an outside insurer is backing the company.

What follows is a chronology of WMI's insurance situation.

May 29, 1985

A federal court approves an $11.4 million settlement of a WMI

shareholders class suit. The shareholder suit was filed in 1983 after

cl's total stock value fell nearly $1 billion in three days following

widespread allegations of environmental violations at WMI sites. The suit

alleged that <1 failed to disclose potential liability arising from ''inves-

tigations, complaints, enforcement actions, and other suits'' relating to

the a's toxic waste handling operations. (140)

February 25, 1986

Greenpeace learns that ars incinerator ship, Vulcanus IA has inade-

quate insurance coverage for a proposed PCB burn of the U.S.'S east

coast. The 'PA requires that the company have at least $60 million in

coverage, but the insurance policy submitted by <1 to EPA would not

cove, the ship's use as an ocean incinerator. No claims would be covered

by the ship's askance policy for any pollution due to toxic burning, and

claims could If made against the vessel in the event of spins or accidents

orm/.y while it is in a ''designated area'' where the ship is permitted to

operate its incinerator. (1734

In 1982 when <1 conducted ocean burns in the Gulf of Mexico, the

firm iso carried inadequate insurance that excluded ''all claims arising

out of and in connection with the use of the Vulcanus/ as a floating factory

(sicj for the poses of waste disposal.'' (173)

page 142

April 1986

A group of U.S. insurance companies drops cl's Environmental Impair-

Management Liability insurance, which covered the company's 16 hazardous

waste disposal sites and 102 municipal waste landfalls in the U.S. The

liability insurance covered such long-term liabilities as leaks from

landfills and groundwater contamination. (178, 219)

April 1987

In a report to its stockholders! WMI announces that it has not been able

to find outside pollution liability insurance coverage (''non-sudden En-

vironmental Impairment Liability coverages since April of 1986. EPA re-

quires hazardous waste disposers to maintain at least $6 million of

liability insurance for each site where the wastes are disposed or to prove

that its assets can cover potential future claims. (178)

The <1 report to stockholders reads: ''As a result of severe difficul-

ties in the current insurance market, the policy limits of the Company's

umbrella liability insurance coverage were sharply reduced upon renewal

on December 31, 1985. Although the reduced limits still far exceed the

largest insured loss ever incurred by the Company, there is no assurance

that this will be the case in the future'' (219)

The Wall/J Street Journal says the ''insurance problem most seriously af-

fects the hazardous waste sites it LWMI1 operates around the county.

The company, which also operates 102 sanitary waste landfills, said At has

been unable to got environmental insurance for those sites as well.'' The

Journal adds that WMI only carries ''a fraction'' of its former environment

tal coverage. (178)

The U.S. Government Accounting Office, in an effort to reveal the gap

between coverage and potential liability, reports that insurers are refus-

ing to cover most waste haulers, fearing ''potentially enormous'' jury ver-

dicts. (278)

May 1990

In another report to stockholders, WMI announces that large amounts of

insurance coverage for non-sudden and accidental Environmental Impair-

Management Liability (EIL) continues to be unavailable. To comply with federal

environments) laws, WMX secured EIL insurance stipulating that they

must reimburse or prefixed the carrier for losses incurred under the

pany's coverage. This is essentially self-insurance under another guise.

''In the event the Company continues to be unsuccessful in obtaining risk-

transfer IL insurance coverage, the company's net income could be ad-

versely abetted if uninsured losses were to be incurred/' <1 adds,

though not detailing how severe their liabilities could be. As of December

31, 1989, WMI was a responsible party to 96 Surround site cleanups,

which could cost $20 to $50 million each. (649) liabilities held by com-

panies may typically be much higher than traditionally reported; ''Com-

panies are not ready to share that kind of information, but I think the

potential liabilities will become critical one day,'' a Wall Street Journal

analyst says. (512)

The American Insurance Group (AIG), cl's insurer and a major in-

stitntional holder in WMI stock (see Appendix B, has lobbied for the crea-

tion of a National Environmental Trust Fund, which would make

Superfund cleanups the responsibility of every business, not just those

that are responsible for a hazardous waste site, by adding a separate fee

page 143

to commercial and industrial insurance premiums in the U.S. (654) The

fund would be flanged by imposing a separate fee added to all commer-

cial industrial property and casualty insurance premiums paid in the

United States. The proposal comes at a time when the insurance industry

faces potential claims on policies that could amount to a great deal of the

$125 billion cost to dean up known sites. (655) ARG is the largest

provider of non-sudden Environmental Impairment Liability coverage. In

essence the proposal amounts to an attempt to shield the company and its

policy holders (such as WMI from going under because they did not

prevent this crisis situation from arising. ''If seems to me that it is

everybody's problem and we ought not to single out one industry or

another and dispose of them along with the waste,'' AIG President

Maurice Greening stated in 1988. (656) ''The pollution damage of today

is the residue of progress made in a past era,'' Greenberg later added,

''viewed in this perspective, it is reasonable to conclude that since society

as a whole benefited from our prior progress, society as a whole should

assume the burden of cleaning up the byproduct of that pro-cess.'' (657)

Yet not everyone profited from the creation or dumping of the wastes.

Not everyone made the reckless decisions that have created the crisis.

Moreover, not everyone suffers as much as the people who live near these

sites. It is fair to ask at this time if companies such as ARG who own stock

in WMI don't have the confidence to underwrite their long-term pollution

risks, then why should a community living near an existing or proposed

WMI landfall or disposal facility be forced to put up with the risks to their

health and local environment?

When insurance companies refuse to cover the types of projects (that

WMI owns and operates), No one accuses them of suffering from

NIMIC-''not in my insurance company.'' Instead, they are praised for

their sharp business acumen. But when the intended neighbors of these

same projects raise objections, they're called ''urreasonable'' ''hysterical

-Will Collette

National Organizing Director/or

Citizens' Clearinghouse For Hazardous Wastes, 1990 (753)

THE EMPIRE EXPANDS: INTERNATIONAL OPERATIONS

WMI is expanding rapidly all over the world. WMI International ac-

counted for about lo percent of-its total corporate sales in 1990. In

1989, <1 International revenue grew 130 percent. (670, 755) What fob

lows are partial descriptions of Mrs operations in specific countries.

Argentina

September 1979

WMI has a 60 percent stake in a $400-million, ten-year contract with city

page 144

and state governments apparently to haul garbage in Buenos Aires. Sen-

sitivity to human rights issues is not a factor in the company's decision to

take the contract with the government: in June of 1979, Amnesty Interna-

tional had followed up a major campaign to draw world attention to the

scale of unacknowledged arrests in Argentina with a published list of

more than 2,500 known cases of 'disappearances.'' The decision of the

municipality to seek private sector proposals, says the president of Waste

Management International (then Dean Buntrock, current WMI CEO),

''reflects the pro-business elides of the federal government which have

created an attractive atmosphere in Argentina-a.'' This statement comes

while Argentina's government is formulating policies that later led to

economic failures precipitating the widespread unrest that culminated in

the Falkland Islands war. (439)

Many workers employed by previous contractors are left jobless air

the consortium's arrival. Dan mewled, a But-shires Herald columnist,

observes in 1982 that eyebrows were raised over the financial outlay,

given ''the less than spectacular improvement in service.. LAJ walk down

a midtown street at 1 a.m. or so, when the rubbish collectors have just

passed by is enough to make one's fifth in the new system droop miserab-

ly: the pavement is own scattered with moldy bread, cooee grounds,

soiled rags, eggshells and fruit peelings. Trash bags which have been

ripped in the process of collection or which have fen torn open by stray

animals are sometimes left lying in the gotten'' (439)

Asia

1990

Thomas Smith, manager of Mrs Par East business development, an-

nounces, as WMI opens an once in. Hong Kong, that Asia will replace

North America as the largest user of cl's cervices within 20 years. For

its bid on a Hong Kong chemical waste plant on the island of Tsmg Yi,

WMI enters into an equity partnership with China International Trust &

Investment Corp,, An investment arm of the mainland government with

the status of a ministry. WMI also enters into a non-equity partnership

with Bechtel, Inc. and Gammon Building Construction Co. (658)

Australia

1984

WMI's Waste Management Queensland Pty. subsidiary wins a seven-

year, sso-millioo contract for residential waste collection in half of the

city of Brisbane, Australia. (672)

1986

Waste Management becomes the first American company to be listed on

the Australian stock market. <1 plans a major expansion in Austria

through acquisition of Australian farms. (242, 243)

page 145

Canada

(See Solid Waste Landfills section for description of WMI involvement in

the Maple Pits, Ontario, landfill controversy)

1989

WMI of North America negotiates a deal with Nottawasaga Township, a

small township (pop. 400) north of Toronto to use as a site for future

Toronto area disposal. Local residents oppose the deal, but township coun-

cil members are determined to push it through. Meanwhile, a new provin-

cial law gives regional governments the right to take over landfill sites.

The county steps in to veto the deal, which may end up in court. (727)

Europe

WMI is expanding rapidly in Europe, where pollution control regulations

are ''still for the most part 1= and/or weakly enforced.' (755). NewsNet

reports in 1990 that Trom a solid waste perspective, Waste Management

has grown its European business from $35 to $500 million annually over

the past two tears.'' (662) The key to WMI Europe/'s superior profits, ac-

cording to Newsnet, ''is controlling disposal because the increased difficul-

ty of obtaining new armies for these facilities limits the competition and

creates scarcity value'' (755) WMI has significant operations m Sweden,

Denmark, Holland, Spain, France, Germany, and Italy.

cl's entrance into the Italian garbage disposal industry market ex-

amplifies the speed of the company's European expansion. In July of

1989, WMI launched a public relations campaign by paying for a trip to

the CWM/SCA Chicago moderator for jonrnalists, municipal waste offi-

cials, and businessmen. Later they took over the first Italian company

handling hospital wastes Osiris) and two of the major private garbage

hauling and disposal companies ('GM and PIEO. These two companies

have hauling contracts in more than 200 communities in Northern Italy.

WMI also acquired three industrial was