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---August 8, 1988---
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The waste hauling industry provides front-line soldiers for American manufacturers who make consumer products out of toxic materials. The manufacturing wastes are dangerous but, more importantly, the consumer products themselves are dangerous when they are discarded into a landfill or an incinerator. The job of the frontline troops is to overcome public resistance and get rid of the toxics any way they can. The manufacturers themselves provide the bulk of the army, the logistical support troops to keep the trucks rolling and the pumps pumping. But the waste haulers do the dirty work, finding ways to get rid of the toxics. In a future issue of HWN, we'll discuss the manufacturers and how they might be persuaded to stop using toxics, but now let's continue looking at the frontline forces--the waste industry.

The basic techniques used by the waste industry were developed by the Mafia. (See HWN #40.) This is not to say that the Mafia controls the whole waste industry, which it doesn't. But, by example, the Mafia has influenced the way many waste haulers do business. For example, the Mafia developed the "property rights system" in which garbage haulers divide up customers, refusing to compete with each other, thus reducing the uncertainties that competition would create, and making it possible for haulers to charge higher prices than a competitive system would allow. This is a form of illegal price fixing, and it has long been a common practice in the waste business. Waste Management, Inc., and BFI, the two firms that dominate the waste hauling industry, have both been convicted more than once on felony counts of price fixing, and today they stand accused in several courts of conspiracy to fix prices and reduce competition on a massive scale. (See HWN #34 and #66.)

In addition to bid rigging and price fixing, the Mafia gets its way by buying the allegiance of officials it needs to control. The waste hauling industry does the same.

Margate City (Florida) Commissioner Rick Schwartz testified in court (in exchange for immunity from prosecution) that he sold his vote on a 1979 city contract to Waste Management for $3,000.

John Horak, former manager of a Waste Management subsidiary was fined $25,000 and jailed for six months for bribing municipal officials in Fox Lake, a Chicago suburb. Under oath, Mr. Horak said the bribe was approved by James deBoer, president of Waste Management of Illinois, who is now himself under investigation.

Raymond Akers, a former Waste Management official bribed Chicago Alderman Clifford Kelley with $10,000 in 1986 to gain a site for a trash transfer station; Mr. Kelley and Mr. Akers are both in jail now.

Lewis Goodman, manager of United Sanitation Services, a Miami (Fla.) subsidiary of Waste Management bribed a city sanitation inspector to steer business to his company; Mr. Goodman was also convicted of price-fixing in 1986.

Much more subtle, and more legal, than cash bribes of local officials are two other common practices in the waste hauling industry: helping elected officials stay elected by fundraising on their behalf; and hiring local officials after a few years of loyal public service.

Florida newspapers report that Waste Management regularly holds fund-raising parties for local officials seeking reelection; in fact they say Waste Management lobbyist Bill Moffatt has held so many fundraisers he can't remember them all. Waste Management puts out about $1000 for food and drink and invites its corporate friends to attend. The corporate friends open their wallets on behalf of a candidate for local or state office; in the time it takes the guests to have a drink and write a check, the candidate collects $7,000 to $12,000 (thus providing 5 to 15% of their campaign chest) and Waste Management has strengthened its connections to the local political structure. No laws have been broken.

Nationally, Waste Management reported donating $248,763 to Congressional candidates in 1985 and 1986. In addition, the firm regularly flies national politicians to its headquarters near Chicago. The politician has lunch with company executives, gives a talk, takes a few questions-and receives $2000 for the trouble. "It's a working session," says Harold Gershovitz, a Waste Management vice president. "They don't just drop by the office and pick up $2000."

Another persistent pattern in the waste hauling industry is that it hires the people who regulate it. If you're a regulatory official, poorly paid (at least by standards set in the private sector), taking flak from the public and from industry--a cushy job in the private sector looks like a "way out." As the kids approach college age and your financial needs escalate, why not bail out and go to work for the polluters? Walter Barber, who used to prosecute Waste Management for the EPA now works for Waste Management. So does former EPA regional administrator Jack Schramm. So does Joan Bernstein, a former general counsel for EPA.

At the nation's largest chemical dump at Emelle, AL, the Alabama Department of Environmental Management's chief inspector, Russ Zora, in 1987 quit and went to work for Chem Waste. So did Craig Brown, who used to work fulltime for EPA monitoring the Emelle site.

Robert Kauth was assistant administrator of Broward County, Florida in 1980 when local officials discovered that, between 1977 and 1980 Waste Management and other garbage haulers had overcharged local residents more than a million dollars for garbage service. That year county auditor Norm Thabit suggested the waste haulers be required to submit audited reports to justify rate hikes. Mr. Kauth successfully opposed the requirement. In 1981 Mr. Kauth went to work for Waste Management, Inc., and the overcharging continued. In late 1987 the Fort Lauderdale SUN SENTINEL revealed that Waste Management had made more than $600,000 overcharging people between 1982 and 1986.

The promise of a future job can go a long way to convince a local official to take a "sensible" view of the world. And the promise need never appear in writing, so there's no evidence of any deal.

Front line troops are necessary in a system that cranks out billions of pounds of poisons every year, year after year. "If we weren't here, you'd have to invent us," says James Range, head of Waste Management's Washington, DC, office. But the troops are generally unwelcome and they concentrate their efforts in places that tend to be Southern and rural and poor. Chem Waste is the Waste Management subsidiary that operates hazardous waste dumps like the largest one in America, at Emelle, AL, which provides about $2 million a year in local taxes. Local people believe their water supplies are being contaminated by the huge chemical dump. But they also desperately need the income. The Reverend Emmitt Summerville led a prayer at the dedication of the new city hall in Gainesville, Alabama earlier this year by thanking the entity that made it possible: "God bless Chem Waste," he exhorted.

Corporate profiles of Waste Management and BFI are available from: CCHW, P.O. Box 926, Arlington, VA 22216; phone (703) 2767070. Both are very revealing.
--Peter Montague, Ph.D.

Descriptor terms: wmi; cwmi; bfi; haulers; organized crime; revolving door; msw; hazardous waste industry; bribes; price fixing; citizen groups; environmentalists; chemical manufacturing; landfilling; incineration; rick schwartz; fl; margate city; john horak; il; fox lake; james deBoer; raymond akers; clifford kelly; lewis goodman; united sanitation services; congress; bill moffatt; harold gershovitz; walter barber; epa; jack schramm; lawsuits; emelle; al; russell zora; robert kauth; norm tabitt; msw; water; groundwater; cchw;

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