Introduction
IN THE 1970s, A NEW MENACE BECAME THE CENTERPIECE FOR A NEW
GENERATION OF environmentally minded reformers. Organized crime, which
controlled the private sanitation industry in the Northeast, moved
center stage. This took place at approximately the same time that the
U.S. government passed the first important toxic waste legislation in
its history. The most significant legislation passed was the Resource
Conservation and Recovery Act that mandated special handling of the
newly recognized category of waste called either toxic or hazardous.
Interestingly enough, the legislation was designed to patrol and
discipline the waste disposers, not the producers. It was based on the
premise that once the waste passed from its producers -- chemical
companies and other industrial firms -- into the hands of the disposers,
it ceased to be the producers' property. In any case, a great deal
of needed attention was focused on the mob firms and their practices.
There was some rectification of this when Superfund legislation was
passed in the early 1980s. It mandated that all responsible parties
(prod ucers and disposers) would have to clean up polluted sites. It has
not always worked very well. I will discuss this issue at some length
using a particularly egregious organized crime waste group as a
template. Concentration on waste disposers had another significant side.
Around 1970, several private carting firms began a rapid process of
expansion, buying dozens and dozens of small carting companies and
landfills across the country. In a relatively short period, they became
the waste industry's most important companies. I will spend some
time explaining the methodology of expansion, for it bears a striking
resemblance to the methods employed by organized criminals. Reformers
particularly watched the giants, if for no other reason than their sheer
size and, as I will show, their penchant to behave improperly.
By the 1990s, the giants had finally moved into the New York marketon the heels of the government finally doing something significant aboutmob control. Once New York was gained, another period of intenseconsolidation took place. Two firms ended up controlling most of the NewYork market. This was a somewhat unexpected development, I suppose, forone of the charges against organized crime was that it had constructed amonopoly in New York. Thus, the criminal cartel monopoly was replacedwith a two-firm oligopoly. I shall argue that the variance between themob cartel and the giants when it comes to legal issues such asantitrust and pollution was not very large. I will take an in-depth lookat the past practices of two large firms that were gobbled up in thelast phase of consolidation in New York, for they were involved to onedegree or another with illicit plans and actions to dump toxic waste inThird World countries. Finally, in the last section of the article, Iwill discuss other kinds of companies t hat routinely pollute.
Criminal Cartels in Waste
In 1957, the U.S. Senate Select Committee on Improper Activities in
the Labor or Management Field, chaired by Senator John McClellan, showed
that organized crime had built "business empires in the private
carting industry through a system of monopoly enforced by trade
associations and cooperative labor unions." (2) This was another
instance of organized crime's domination of certain working-class
trades in New York, which included, at one time or another, cinders,
cloth shrinking, construction, flower shops, the Fulton fish market,
funeral homes, hod carrying, ice, kosher butchers, laundry services,
newsstands, overall makers, paper hangers, taxicabs, waterfront workers,
and window cleaners. (3) Among the McClellan Committee's findings
after two investigations, one in Los Angeles, was the degree of
ethnicity and kinship that bound racketeers in waste together. In Los
Angeles, Armenian heritage appeared to be the primary connecting link,
while in New York Italian roots were most significant. Among the owners
of garbage firms who were identified as racketeers in the Greater New
York area were Antony Ricci, Carmine Tramunti, Anthony Corallo, Nunzio
and Vincent Squillante, Nicholas Ratteni, James Licari, Gennaro Mancuso,
Alfred Toriello, Frank Caruso, Joseph Feola, and Anthony Carfano.
Several had already acquired major reputations as organized crime
felons.
It is not unusual to find a common heritage supported bysometimes-complicated kinship patterns in trades, including thoseassociated with waste. A survey of Paris sewermen in 1979, for example,found a persistence of "hereditary endogamy." Parisian sewerworkers were "more commonly introduced into the service by anotherrelative who had been or was a sewerman--nephew, uncle, cousin,brother-in-law, and so on." (4) Of course, Parisian sewermen didnot go on to own private sewer businesses and create monopolies based oncriminally coercive practices.
At the base of the private sanitation criminal domains was the
principle of "territorial rights," later called "property
rights." This meant that whatever garbage firm first contracted
with a business to pick up its rubbish had a right to that business
forever. Indeed, the right extended to the location itself, no matter
what happened to the original contracting party. Naturally, it was a
method of dimming competition, although sometimes it was honored more in
the breach than otherwise, especially given racketeers' propensity
to cheat and steal from one another.
Following the McClellan Committee's work in 1957, local,
state, and federal authorities pursued garbage racketeering decade after
decade. Numerous investigations took place chiefly in the five boroughs
of New York City, in Nassau and Suffolk Counties on Long Island, in
Westchester, Putnam, Orange, and Rockland Counties, just north and north
west of the city, in Northern and Central New Jersey, and at times in
Philadelphia. Each investigation and prosecution revealed organized
crime's monopolies in private sanitation work.
The Routine Activities of Criminal Waste Enterprises
All County Environmental Service Corporation and its related firms
is a template for the mob-related solid and hazardous waste companies
investigated over several decades in the New York Metropolitan Area. It
was a transporter of septic and hazardous wastes, a hazardous waste
facility, and a devotee of illegal hazardous waste disposal. The New
York State Assembly Environmental Conservation Committee offered an
historical account of All Country, its crimes, and corporate
permutations from 1977 through most of 1984. (5)
For almost a decade, John, Robert, and Joseph Mongelli, together
with brothers Frank and John Coppola, owned and operated the Warwick,
New York, headquartered All County. (6) In addition, the Mongellis owned
several waste disposal companies--I.S.A. of New Jersey, Inc., (7)
Tri-State Carting, Inc., ( cool Grace Disposal and Leasing, Ltd., (9)
Orange County Sanitation, Inc., (10) and Round Lake Sanitation
Corporation. (11) In testimony before the U.S. Congressional Committee
on Interstate and Foreign Commerce in 1980, two detective sergeants with
the New Jersey State Police, Dirk Ottens and Jack Penny, presented
evidence tying the Mongelli family to Mario Giganti, one of the
important leaders of a major organized crime syndicate known as the
"Genovese family." (12) Giganti, the Mongellis' ultimate
boss, was somewhat foolishly listed on the payroll of Round Lake
Sanitation in New York as a solicitor. By 1986, Louis Mongelli was
described as a "reputed...Genovese crime family member." (13)
In 1989, John Coppola bec ame a valued member of a New Jersey
gubernatorial campaign team. (14)
The Mongellis and their associates were primarily engaged in the
illicit disposal of hazardous waste. In 1977, they took over the
Penaluna Road landfill in Warwick, New York, and dumped toxic waste at
will, thereby threatening Greenwood Lake, a source of drinking water for
around one million northern New Jersey and New York inhabitants. I.S.A.
trailers were spotted unloading drums of sludge composed of oil, grease,
and degreasers, while a Grace Disposal worker was on hand to flatten the
empty drums. Other information clearly showed industrial waste from a
nearby Ford plant was also disposed of at the landfill. Finally, the
Newark Star Ledger reported that "thousands of gallons of
'solvents...paint and pigment residues...dirty thinners...still
bottoms...glue residue' and other organic, toxic compounds were
picked up from industries in New Jersey and slated for disposal at
Warwick."(15) To cover their tracks, the criminals created phony
records indicating some of these wastes went to a "safe"
landfill that did not actually exist, and to another that had no record
of receiving any of the toxic products, even though it probably did.
The New York Department of Environmental Conservation (DEC) ordered
the Penaluna landfill closed in 1980. Grace Disposal went out of
business and the site, reported Assemblyman Hinchey, "which is 36
acres in size and 50 feet deep, is now leaching organic chemicals and
the toxic metals--cadmium, lead, and mercury--into a stream and wetland
that feed Greenwood Lake." The estimated toxic leachate, according
to the DEC, was 7,200 gallons per day.
In the summer of 1979, All County moved some of its operations to
New Jersey, though it still maintained a significant presence in New
York. It bought several storage facilities in the town of Edgewater, on
the shore of the Hudson River, and another in Newark. It did not inform
New Jersey authorities about the Edgewater facilities. They were
discovered by New Jersey's Department of Environmental Protection
(DEP) over a year later. By the spring of 1983, the Mongellis and their
partners had a long list of hazardous waste violations in the State of
New Jersey. From Edgewater, All County improperly disposed of hazardous
waste at Mount Marion, New York. It continued its past practice with
waste from the Mobil Chemical Company in Edison, New Jersey, carting it
to Wayne, Pennsylvania. It also hooked up with a New Jersey firm, S
& W Waste, that hobnobbed with racketeers and top state politicians.
(16) In one deal, All County delivered PCBs to S & W even though it
was not licensed to receive them. Other similar All County violations
followed. For example, it delivered 3,338 gallons of supposedly
flammable solvents to a facility in Virginia. Burned three days later,
it was subsequently learned that the shipment was laden with PCBs. Once
again, All County was not authorized to handle PCB wastes and the
facility was forbidden to burn them.
The Coppolas severed their relationship with All Country in the
spring of 1983. At the same moment, the Mongellis sold All County to a
former employee, James Strom. He had first-class training in illegally
disposing of hazardous waste, having worked at the notorious Kin-Buc
landfill in Edison, New Jersey, the largest and leakiest chemical,
landfill in the Northeast. It was closed in 1977 when toxic chemicals
from the site were found pouring into the Raritan River, a major
drinking water supply. In this ever so slightly revamped venture, Stroin
was joined by David Rosenberg, who remained at his post of vice
president and operations manager for the firm. It was more of the same:
principally the illegal disposal of PCBs. Stroin and Rosenberg only
lasted in business about eight months because they were caught sending
PCBs from the same facility to the Virginia firm that had illegally
burned them for the Mongellis.
All County, under the ownership of the Mongellis and Coppola, had
other criminal business associates. One was RA-MAR Waste Management,
owned by another Coppola brother, Ralph. This firm specialized in septic
tank cleaning and waste-oil collection. RA-MAR serviced Westchester,
Orange, and Rockland Counties in New York and was headquartered in New
York and New Jersey. RAMAR's operating philosophy was almost a
mirror image of All County's. From the autumn of 1979 to the summer
of 1981, RA-MAR was cited for 20 distinct toxic waste violations in New
Jersey. RA-MAR and All County worked closely together from time to time.
There was also a strong connection between RA-MAR and two large New
Jersey-based waste-oil recovery companies--Noble Oil and Oil Recovery.
Between May 1983 and January 1984, RA-MAR reported taking 695,000
gallons of waste oil to Noble Oil Company alone. In May 1984, the two
waste-oil firms were indicted for their participation in a "massive
operation in which hazardous chemical wastes were mixed with heating oil
and then sold to the public." The corporate officers, Christopher
Grungo (Noble Oil) and Joseph Cucinotta (Oil Recovery), were charged
with conspiracy, theft, deceptive business practices, and the illegal
transportation and disposal of hazardous waste. (17) Nonetheless, in May
1984, RA-MAR's permit to haul waste oil to Noble Oil and Oil
Recovery was renewed by New York State's environmental agency.
"Although All County Environmental Service Corporation is not
presently in operation," Assemblyman Hinchey noted back in 1984,
"the Mongellis and Coppolas still operate waste disposal businesses
in New York State." He added, "Round Lake Sanitation collects
garbage in Orange, Ulster, and Sullivan Counties," and Round Lake
and another Mongelli/Coppola business, Tri-State Carting Corporation,
"are currently permitted by DEC to transport industrial
wastes." ISA of New Jersey was still hauling garbage in Orange
County, New York. Obviously, the Mongellis were not deterred by their
past legal difficulties or by Assemblyman Hinchey's report.
The final section of the report contained Hinchey's
suggestions. All of these facts, he wrote, establish the need for
"significant changes in the solid waste permitting program as well
as further investigation of specific corporations and individuals who
are chronic violators of the Environmental Conservation Law and who
associate with businesses having similar backgrounds." Hinchey
wanted a tough "permit program to regulate private garbage
haulers," an absolute "prohibition on the approval of permits
to individuals who simultaneously operate hazardous and solid waste
disposal companies," and a meaningful review of DEC's
authority from the New York State Legislature to deny and revoke
permits. Hinchey's ideas did not take root, at least in his
estimation. His committee continued to bedevil the New York (and
federal) regulators through the early 1990s with reports and hearings
that proved the regulators, at least, were not paying very much
attention to significant criminal polluters. (1 cool
In one remarkable case, Hinchey's chief investigator, Arthur
John WoolstonSmith, determined that an organized crime felon, Frank
Sacco, was running a landfill in the Hudson Valley town of Tuxedo, about
30 miles north of the city. Sacco had past convictions and prison
sentences dating back 45 years that included an assault (stemming from
an arrest for rape), extortion, loan sharking, witness tampering,
robbery, dealing in stolen securities, and an escape from prison, to
mention a few. The town's Justice of the Peace leased the site to
Sacco. Others involved with Sacco in this deal were a former assistant
district attorney, the Tuxedo police chief, and a DEC official who took
bribes from Sacco and ended up as his mistress. (19) When Sacco's
landfill was finally closed, shallow groundwater monitoring established
arsenic, iron, manganese, and selenium at levels in violation of
drinking water standards. Substantial concentrations of lead were found,
as well as moderate levels of toluene, benzene, xylene, trichloro
ethylene, ethylbenzene, carbon disulfide, and z-butanone. The hazardous
wastes at the site were attributable to "petroleum contaminated
waste soils and waste contaminated with industrial solvents." (20)
The dead body discovered in the landfill was one of Sacco's
employees. (21)
The Mongellis were finally run to ground by federal authorities in
the 1990s, although not because there was a structured inquiry into
criminal waste firms. It began because an FBI agent used to take his
morning coffee in a restaurant next to a Mongelli facility. The agent
became upset with the odors wafting into the coffee shop and determined
to find out who or what was causing his morning nausea. That led to
several queries and those eventually led to an investigation. (22) As a
result, in October 1991 the Mongellis were indicted on federal
racketeering charges for paying off the "Genovese crime family and
trying to bribe a state environmental official." (23) Also indicted
were the following Mongelli companies: Round Lake Sanitation, I.S.A. in
New Jersey, Orange County Sanitation, Continental Technology, Lake
Region Service Garage, and AAA Recycling. The Mongelli's, according
to the FBI and Otto G. Obermaier, the U.S. attorney from the Southern
District of New York, "siphoned millions of dollars in cash fro m
their businesses" using "a number of intermediaries to
'launder funds' for them" for nefarious purposes. They
were caught in an undercover operation offering bribes "ranging as
high as $500,000 for the first year and $300,000 for each succeeding
year" to a detective posing as a high-ranking DEC official. (24)
They wanted another landfill. It would take several years before the
case was settled and the Mongellis punished.
National Firms: Illicit Behaviors
In the late 1960s and early 1970s, three sanitation firms, one in
Boston, another in Chicago, the third in Houston, began a process of
rapid expansion. Their growth took place in tandem with the full
blossoming of the environmental movement in the U.S., which forced the
government to create the Environmental Protection Agency in 1970 and to
pass important legislation dealing with toxic waste disposal during that
decade. The Boston firm, SCA Services, did not quite make it to the top.
It was publicly burned for its involvement with organized criminals in
New Jersey and corporate leaders with exceptionally sticky fingers.
In testimony before the U.S. House of Representatives Subcommittee
on Oversight and Investigations in 1980 and 1981, a former gangster
detailed SCA's complicity with organized crime. At one hearing, the
Committee summed up his testimony about SCA's expansion, noting
that in its expansion in the early 1970s, it bought small garbage firms
and gave the owners stock in SCA and an employment contract to continue
operating their former firms as before. The gangster pointed out,
somewhat inarticulately, what this meant in New Jersey: "So you
have the same people that individually were controlled by organized
crime into SCA." (25) SCA's reputation took an exceptional
drubbing in December 1980, six days after the subcommittee's first
hearing featuring the reformed felon's dissection of SCA's
ties to organized crime. This time it was tied to an organized crime
homicide. On December 22, "Crescent Roselle, general manager of
Waste Disposal, Inc., one of SCA's largest New Jersey subsidiaries,
was brutally murdered in a ga ngland-style execution," shot
numerous times while sitting in his car outside his company office. (26)
In the subcommittee's May 1981 hearing, a New Jersey law
enforcement official blunfly stated that SCA had other subsidiaries that
were managed by mobsters. (27)
The other two national (in time, international) companies,
Chicago's Waste Management Inc. (WMI) and Houston's
Browning-Ferris Industries (BR), fared far better than did SCA. Their
chiefs quickly stepped to the level of the very rich. Waste Management
and Browning-Ferris did have their bumpy moments. In the past three
decades, each has pled either guilty or nolo contendere to various
charges ranging from environmental malpractice to shady business
activities. Each has aggressively maintained, however, that these
problems were the result of simple mistakes, common industry errors, or
isolated acts carried out by lower-level employees who misbehaved
without the knowledge of the organization's leadership.
In a massive class-action civil case against Waste Management,
Waste Management of North America, Waste Management Partners, and
Browning-Ferris, filed in summer 1988, however, afar different picture
emerged. There were seven named plaintiffs in this case: (1) Cumberland
Farms, an operator of convenience stores throughout the United States;
(2) Kirschner Brothers Oil Co., a marketer of petroleum products; (3)
Dan Rosenberg, d/b/a Animal Hospital of Chester County, an individual
who operates an animal hospital; (4) George Gusses, an individual who
operates a business; (5) the Perry Corporation; (6) Uncle Donald's,
d/b/a Huey's; and (7) Overton Pub, d/b/a East End Pub. The suit was
based on alleged violations of Title 1 of the Sherman Anti-Trust Act. In
it, the named plaintiffs and the class they represented, who "have
directly purchased, in the course of their business, containerized solid
waste removal and disposal services from one or more of the defendants,
their wholly-owned subsidiaries, affiliates, and alleged
co-conspirators," (2 cool were all customers of either WMI or BR. The
plaintiff's attorneys alleged that WMI and BFI "engaged in an
extensive pattern of anticompetitive activity across the United
States," engineered and directed by their "national and
regional officers." (29) In a 111-page memorandum developed in 1990
that successfully defeated a motion by the defendants for a summary
judgment, the plaintiffs' attorneys started with 10 key points:
1. George Farris, BFI's chief financial officer, met with
Donald Flynn, WMI's chief financial officer, and with Harold
Gershowitz, WMI's senior vice president. Flynn and Gershowitz
disclosed that, in view of the fact that "the environment for price
increases is improving," WMI planned to implement a
"'4-5%" national price increase over the next few years.
This one meeting alone compels the denial of defendants' motion.
2. A government memorandum reported that criminal price-fixing by
the defendants in Atlanta "can be attributed to more than overly
aggressive local managers" and was "probably directed by
corporate officials from the company headquarters."
3. A sworn declaration from a BFI sales manager describes how John
Drury, then BFI's executive vice-president, orchestrated
price-fixing activities in Atlanta.
4. A former BFI executive testified that BFI' s national
director of labor relations told him to "get together with Waste
Management" and end a price war in Ohio.
5. Ed Drury, BFI's national vice president, directed price
fixing in the Arrowhead region (Colorado, Nebraska, Iowa, Wisconsin,
Minnesota, North and South Dakota, Wyoming, Montana, and several
Canadian provinces). (30)
6. John Drury, BFI' s president, personally appointed John
Pinto as vice president to head BFI's northeast region. Pinto had
clear ties to organized crime and was subsequently indicted and pled
guilty to bid rigging, price fixing, and bribery of officials.
7. John Drury, BFI's president, assigned a new district
manager to Pittsburgh with instructions that the sales manager report
directly to him. The district manager proceeded to engage in
price-fixing and bid rigging, and periodically delivered suitcases of
cash generated from these activities to Houston for use as payoffs to
public officials.
8. A BFI salesperson testified that she was not permitted to
solicit WMI customers and when she attended sales meetings with
salespersons from other districts, learned that it was a company-wide
policy.
9. Both BFI and WMI encouraged price-fixing by actively promoting
employees who engaged in it. Bruce Ranck, for example, was a principal
target of a state antitrust prosecution (which BFI settled for $350,000)
and federal antitrust prosecution (to which BR pled guilty and paid a
one million dollar fine). Notwithstanding his involvement in illegal
activity, Ranck was promoted and now holds the position of executive
vice-president of BFI, with responsibility for all of BFI's North
American solid waste operations.
10. BFI's vice chairman and national director of marketing,
Norman Myers, paid a bribe to defeat a competitor's landfill
application, and then attempted to conceal this payment. (31)
Plaintiffs' attorneys went into the history of WMI, pointing
out that WMI's predecessor firms belonged to the Chicago Suburban
Refuse Disposal Corporation (CSRDC) through the 1960s and into the early
1970s. Nearly all the private waste companies in Chicago were part of
CSRDC and operated under a system called the "Chicago Rules,"
which added up to precisely the same system of "property
rights" discovered by Senator McClellan in his New York racketeer
investigation. (32) Furthermore, it was asserted that as soon as WMI was
formed in 1968 and BR in 1969, they started to buy CSRDC companies.
"As members of the Chicago families became absorbed into WMI and
BR," the plaintiffs' memorandum holds, "the 'Chicago
rules' became a national code of conduct." (33) In terms of
the structure of waste malfeasance, the mobsters in New York and New
Jersey ruled through the "property rights" system and,
importantly, through their control of private landfills (although
illegal entry to municipal landfills through bribes has bee n a constant
as well). (34) The Pennsylvania case alleges that WMI and BFI did the
same. "The defendants have gone to extraordinary lengths to obtain
control of landfills," the plaintiffs' counsel argued,
"including the bribing of state officials." (35)
The plaintiffs' claims were further buttressed by a detailed
and damning series of cases that included examples from the 1970s and
1980s. There were bribery and price-fixing cases, including a 1987 case
in Ohio that alleged BFI and WMI subsidiaries engaged in price-fixing
and "customer allocation" in violation of the Sherman
Anti-Trust Act. The companies pled guilty and each paid a one million
dollar fine. (36) In the five-year period before the filing of the
Pennsylvania case, it was pointed out that "federal prosecutors
convened grand juries to investigate anticompetitive conduct by BFI or
WMI subsidiaries in Rochester, New York; Toledo, Ohio; Orange County,
California; San Diego County, California; Memphis, Tennessee;
Birmingham, Alabama; Orlando, Florida; Jacksonville, Florida; Phoenix,
Arizona; Kansas City, Missouri; Oahu, Hawaii; Pittsburgh, Pennsylvania;
and Columbus, Ohio." (37) Most of the fines were below one million
dollars and had no effect on the companies' earnings.
In fact, from 1977 to 1989, WMI's gross income went from $60
million to $850 million, and BFI's zoomed from $33 million to $423
million. The chief operating officers' earnings were spectacular.
From 1987 to 1989, WMI's chief executive officer, chief operating
officer, and treasurer received compensation packages of $12.8 million,
$16.3 million, and $25.1 million respectively. In 1989, their personal
holdings in WMI stock had a value of $l17 million, $38 million, and $33
million. (3 cool
To drive home the plaintiffs' point that the price-fixing
conspiracy was national, the memorandum claims to have "hard,
documentary evidence that the highest ranking officers at BFI and WMI
met to exchange information regarding future pricing." (39)
Supposedly, they met under the guise of what they called "The
Splinter Group of the New York Society." In their summation,
plaintiffs' attorneys noted that WMI's chief financial officer
and its senior vice president, and BFI's senior vice president
attended these meetings. There they shared information on "future
marketing plans...bids on future projects, expansion plans, anticipated
capital expenditures, profit margins, and dividend policies." (40)
There is little doubt that the plaintiffs' suit had merit and
it established that at least part of organized crime's methodology
of control in the waste arena, so strongly and repeatedly condemned, has
likely been common waste industry practice. At the center nestled
"property rights/Chicago rules." Corporate expansion, on the
other hand, was engineered through "predatory pricing"
practices designed to drive uncooperative small firms to the wall. As
Professor Howard Smith describes it, "a price is predatory if it is
below the seller's otherwise profit-maximizing price and is charged
for the purpose of eliminating competition in the short run and reducing
competition in the long run." (41) Once that is accomplished and a
monopoly, or more likely, an oligopoly achieved, prices rocket up. On
October 30, 1990, Waste Management agreed to pony up $19.5 million and
Browning-Ferris $30.5 million to settle the antitrust case. (42)
Cumberland Farms: Sins of the Plaintiff
The above discussion should not be taken to mean that the first
named plaintiff in the case, Cumberland Farms, was itself a
"clean" company. The company started life in 1938 as a
roadside milk and egg business in Cumberland, Rhode Island, A Greek
immigrant, Vasilios Haseotes, owned the stand and turned it into a
convenience store. It eventually became the nation's third-largest
convenience store chain, and the largest independent gasoline retailer
in the 1980s. It reached the top after buying most of Chevron's and
Gulfs northeast marketing facilities for around $350 million. This
purchase gave Cumberland an additional 3,373 jobber and dealer supply
contracts, and 20 terminals. (43) Clearly, this was its high point. On
January 7, 1991, Cumberland was sued by the Department of Justice and
the Environmental Protection Agency for "unlawfully filled
wetlands." (44) More bad news came that summer. The Philadelphia
Inquirer reported that Cumberland Farms coerced "its
convenience-store employees to confess to thefts they had not
committed." (45) In the spring of 1992, Cumberland filed for
Chapter 11 protection. (46) Several years later, Cumberland lost a suit
to Goldman Sachs for stealing three million barrels of oil from
Goldman's trading unit, J. Aron. This was the culmination of years
of legal wrangling and payouts by Cumberland to Goldman. Earlier,
Goldman had recovered approximately $41 million from Cumberland, which
it accused of "unauthorized blending, burning, and outright theft
of about 5% of the 57 million barrels that J. Aron processed." (47)
More dreary environmental news was still to come, including
Cumberland's neglectful running of an air-polluting refinery in
Newfoundland. (4 cool
The Changing New York Market and Waste Consolidation
During the 1990s, New York prosecutors, particularly Robert
Morgenthau, the New York County (Manhattan) district attorney, finally
took on the task of busting organized crime's dominance in the
private New York waste market. They successfully prosecuted some and
sued others from the underworld of waste and their trade associations
(including The Greater New York Waste Paper Association, The Kings
County Trade Waste Association, the Association of Trade Waste removers
of Greater New York, and The Queens County Trade Waste Association).
(49) In this complicated and long investigation, BFI played an
undercover role in the demise of the organized crime cartel. With
BFI's permission, Morgenthau placed an agent into its New York
operation. Evidence was gathered on the mob's tactics in an attempt
to chase the firm from the city. BFI trucks were tailed, stolen, and
disabled. Executives endured threatening phone calls and letters. (50)
In June 1995, Morgenthau's 114-count indictment ended the siege.
Almost two years later, BFI bought the Manhattan routes and trucks of
one of the mob outfits, Five Bros. Carting Co, whose owner, Michael
D'Ambrosio, was secretly recorded telling Morgenthau's
undercover agent that BFI was "a bug that needed to be
crushed." (51) D'Ambrosio pled guilty to "enterprise
corruption." He was fined one million dollars and sentenced to
prison.
The giants (BFI and WMI) had finally broken into the New York solid
waste market, the nation's largest. Joining them in New York were a
fast-rising firm named USA Waste Services and a smaller conglomerate,
Eastern Environmental Services, with deep ties to the largely criminal
New Jersey scene. Though some in New York talked about stasis in the
newly consolidated market, remarkable changes were on the way.
The most stunning development was a merger between WMI and USA
Waste. In 1998, "old" WMI was "acquired by smaller rival
USA Waste Services Inc. for stock valued at about $13.5 billion."
Although the new company would still be called Waste Management, it
would be run by the leaders of USA Waste, with its main corporate office
in Houston. (52) The result of the logic of consolidation, cost
reductions were achieved by consolidating routes and sacking
"redundant" employees. (53) The move was carried out by USA
Waste's chairman, John Drury, the former BFI president who was
identified as a key director of the long price-fixing conspiracy with
WMI in the Cumberland Farms et al. case.
Consolidation's Odd Twists and Turns: The Return of the
Irrepressible
In 1990, Drury quit BFI in a disagreement over policy issues. Three
years later, he was asked to head USA Waste. He took the post in 1994
and mandated "no recycling, no overseas ventures." (54) Under
Drury, USA Waste was on the prowl for other waste companies. In 1995, it
gobbled up Chambers Development, "which had 50 collection
operations in eight Atlantic seaboard states." The following year
it bought out a California-based firm that also operated in Texas,
Louisiana, Arkansas, Colorado, and Florida. Around the same time, USA
Waste announced it would buy another waste conglomerate, United Waste
Systems, based in Connecticut. The Connecticut firm had purchased five
waste collection businesses and two transfer stations in Wisconsin,
Minnesota, and Pennsylvania the year before. (55) On the last day of
1998, Drury bought out Eastern Environmental Services. (56) Now only two
major competitors remained "in the multibillion-dollar trash
disposal market in New York City and...in cities in Pennsylvania and
Florida," said a somewhat concerned Justice Department, which
nevertheless allowed the deal to go through after Eastern and Waste
Management shed some companies in several states. (57) Eastern had just
acquired several allegedly "former" mob trash firms in New
Jersey, and two Florida firms. One beneficiary of the Waste
Management-Eastern deal was an emerging trash conglomerate, Republic
Services, headed by Wayne Huizenga, who was responsible for the original
creation of Waste Management in Chicago. Huizenga, like Drury, had taken
time off from garbage. However, he spent his off time creating
Blockbuster Video, the nation's largest video rental company, and
buying a professional sports team or two, a stadium here and there.
Republic picked up some of the discarded firms and was well on its way
to becoming another major player in the wildly consolidating waste
world.
USA Waste: Two Sleazy Background Issues
USA Waste was pushed into the very big leagues of waste, before its
deal with Waste Management, through its purchase of United Waste
Systems, which came to life in 1989 under the aggressive leadership of
its 33-year-old chairman and CEO, Bradley S. Jacobs. (5 cool By 1992,
United had landfills and composting and recycling centers in West
Virginia, Pennsylvania, Massachusetts, Kentucky, Mississippi, Michigan,
and Connecticut. Despite these activities, it had lost $4.5 million
since 1990. Nonetheless, some observers thought its prospects were
promising, for United raised $36 million in new capital in 1992 through
an Initial Public Offering (IPO) of its stock. It planned to spend the
money on five new acquisitions. (59)
1. The Meditative Bradley Jacobs
Chairman Jacobs' background was somewhat baffling. According
to the Hartford Courant (Connecticut) newspaper, Jacobs' CEO
experience started in 1979, at the age of 23, with Amerex Oil
Associates, which had its corporate offices in Morristown, New Jersey.
(60) From 1984 to July 1989, he headed up an international trading
company based in England, Hamilton Resources (UK) Ltd. (61) What Jacobs
did for, or with, Amerex or Hamilton Resources is not noted in any
published account of his background. It seems there was much to hide,
for he had worked with a cast of Europeans and Americans suspected of
illicitly selling toxic waste to the impoverished West African country
of Benin, making night runs of toxic waste to other West African
countries, and likely selling oil to South Africa while the
U.N.-sponsored embargo of oil to Pretoria was running.
To attempt to unravel this suspected misbehavior and place it into
perspective, one must go back to a company called Pan Ocean Oil, which
started in 1970 with $16 million in cash. Six years later, after it
finally hit pay dirt drilling in the North Sea, Marathon Oil bought it
for $260 million. (62) In the extremely complex structure of an oil
major, Pan Ocean's ownership had been in the hands of
Marathon's wholly owned subsidiary, Interocean Oil. This entity
became, or was subdivided into a firm called Interocean Oil (Nigeria).
On November 1,1982, all of Interocean's stock was sold and its
interest in what was by then Pan Ocean Oil (Nigeria) was
"transferred" to Impex Ltd., a firm incorporated in Anguilla,
a small and somewhat notorious island nation in the British West Indies.
(63) Anguilla's notoriety is based on its penchant for allowing a
host of criminals, many in the narcotics business, to establish phony
banks, some no more than trailers in goat pastures.
Pan Ocean next turned up as a series of interrelated firms: Panoco
Group, PNOcean (supposedly with offices in New York and Houston), Panoco
International, Panoco (Geneva), Panoco (Nigeria), and Panoco (Benin). To
muddy the waters a little more, a Panoco entity was affiliated with the
United States Oil Co., based in New York, whose director also ran Panoco
(Geneva), which, it was reported, "operates in Nigeria through Pan
Ocean Oil (Nigeria). (64) The Geneva-based Panoco, and I presume all the
rest including Impex in Anguilla, were directed by an Italian, Vittorio
Fabbri, who had an office at 375 Park Avenue, New York. Standing behind
Fabbri as the owner of most of the above entities was supposedly another
Italian named Bellini.
British journalists from Box Television tie Bradley Jacobs to this
group, since Fabbri supposedly introduced him to the pleasures and
potential profits of selling European and American hazardous waste to
Beam. In 1985, Panoco (Geneva) persuaded the Benin authorities to
scuttle a contract with Saga Petroleum, a private Norwegian oil company,
and instead to contract with Panoco (Beam). (65) It was the beginning of
a very convoluted series of deals, unraveled principally by Box reporter
Adam Kemp, that ultimately led to Jacobs. Kemp found that the Republic
of Benin agreed to receive about five million tons of toxic waste a year
for 10 years for a "mere two dollars and 50 cents a ton." The
contact was signed with a Gibraltar company named SESCO. Looking for
SESCO led Kemp to London's elegant Eaton Square and Hamilton
Resources, which was listed in the phone directory as a "Local
Listening Post for Crude Oil Market." A little sleuthing turned up
an item from Greenpeace, which accused Hamilton of involvement in a
"possible dumping deal" with impoverished Guinea Bissau.
Hamilton issued a denial stating, "our company has never made any
attempt to build a landfill" there. Kemp went to Companies House in
London, where he discovered that almost all the shares of Hamilton
Resources were owned by Hamilton Resources (Gibraltar). Moreover,
Hamilton and SESCO used the same registered office, Finsbury Management,
in Gibraltar. Documents showed that SESCO and Hamilton (Gibraltar) had
appointed, at the same time, two other firms as directors--"Amwell
Servicing and Tikka Overseas Amwell Services, in the British Virgin
Islands." A check of documents in Washington, D.C., revealed SESCO
correspondence signed by Josephine Mandel, apparently a company
director. She subsequently appeared as the company secretary of Hamilton
Resources UK Ltd. Hamilton's records listed her address as
"Lima, Peru." Not unexpectedly, inquiries in Lima to find her
were fruitless.
London's Hamilton Resources listed a Jill Aldridge as another
director. She had an address in Holland that turned out to be a
Transcendental Meditation study center run by followers of Maharishi
Mahesh Yogi. Aldridge had lived there, but left a few months before Kemp
arrived in Holland looking for her. Box Television reportedly found her
working at Roydon Hall, the "cult's headquarters" in
Kent. Bradley Jacobs was also known as a devotee of Transcendental
Meditation. Kemp called Jacobs, who admitted he knew the name Jill
Aldridge and then rang off.
Benin was the last stop in this puzzling investigation. Beam's
self-styled Marxist President, Mathieu Kerekou, had signed a contract
with SESCO's representative, Lamia Catche, for a 10-year toxics
deal. In other Beam government documents, however, Mine. Catche is
"named as Executive Vice President of the Group Hamilton
Resources." Kemp gathered increasing evidence that proved Bradley
Jacobs had put together a three-part transnational toxic waste dumping
scheme. First, a network of waste brokers was created to scour factories
in Europe for product; second, SESCO was formed to do the same in the
United States; and third, MJ Carter Associates was retained to help plan
a huge landfill in Benin.
The waste intended for Benin was described as "very, very
volatile solvents, which would fairly readily burst into flame."
There were also herbicides, methylene chloride, and degreasing solutions
made of "organo-chloride compounds" that were guaranteed to
evaporate under the African sun and thus pose a serious health hazard to
landfill workers and the many people living on the perimeter of the
site. Benin' s alarmed health minister, Andre Atchade, wrote the
following to President Kerekou: "These schemes are disastrous for
our country and constitute a threat to the safety of our land and
people.... We should remember Chernobyl." The president fired him
and then placed him under house arrest for his audacity. Jacobs first
denied having anything to do with the project. He told Kemp, "you
know, it's a farce; it's like a total farce." Later,
however, he admitted his involvement.
2. Eastern Environmental: The Saga of the Unwelcome Ash
Another USA Waste purchase, Eastern Environmental, had a problem
stemming from the dumping of toxic waste in the Third World. In 1988,
between 2,000 and 5,000 tons of Philadelphia's toxic incinerator
ash were dumped on the beaches of the Haitian coastal town of Gonaives.
(66) The ash was the property of a waste disposal outfit, Joseph Paolino
and Sons. That firm had taken over a six million dollar contract to
dispose of Philadelphia's ash, which "contained lead, cadmium,
barium, arsenic, mercury, dioxin, and cyanide." (67) Paolino hired
Amalgamated Shipping of the Bahamas, which engaged the ship Khian Sea to
carry the ash somewhere in the Caribbean. The ship left port on August
1986 with approximately 14,000 tons of ash. It tried to unload in the
Bahamas but failed. Then it spent almost two years in limbo trying to
find some Caribbean country that would make the deal. In the last week
of October 1987, Haiti's Department of Commerce granted permission
for the ship to unload on the beach at Gonaives. Within a few days,
however, the Haitian government, in particular the Minister of Commerce,
announced a change in policy and wished to cancel the permit. It was too
late. The ship was gone and part of Philadelphia's ash lay on the
beach. (6 cool
About 10,000 tons remained on board when the Khian Sea slipped out
of Haitian waters. The ship tried repeatedly to find a country to accept
the cargo. It underwent suspicious name changes and sailed to the
Mediterranean to try several spots, including Suez. Finally, somewhere
between Suez and Singapore, it offloaded the rest of Philadelphia's
ash.
Years later, the New York Trade Waste Commission, a new regulatory
agency put in place by Mayor Rudolph Giuliani to help combat mobster
control of the waste industry, found a connection between Eastern
Environmental and Joseph Paolino and Sons, and thus the toxic ash. The
head of Eastern and its largest shareholder is Louis D. Paolino, one of
Joseph's sons. The old man had died in 1984, but the firm
continued. In 1991, it was charged with various crimes related to
cheating its workers out of wages and benefits. In 1995, it was fined by
the Nuclear Regulatory Commission for having radioactive material
without a permit. After that, it seems to have disappeared. The Trade
Waste Commission determined that Eastern would not be licensed to
operate in the city until it helped to clean up Gonaives. Although
everyone involved seems to deny a connection between the Paolino company
and Eastern Environmental, beyond the genetic, Eastern finally agreed to
pay two-thirds of the costs to remove the ash from Haiti. (69)
3. Serious Strains in the Marriage
The waste industry is so volatile that centralization soon began to
crack a bit. At the turn of the millennium, the new Waste Management
filed a lawsuit concerning its $1.3 billion purchase of Eastern
Environmental, which it was alleged, "overstated its profits."
(70) John Drury, who by August 1999 had become Waste Management's
former chairman and CEO, was also named in the suit, as was Rodney
Proto, WMI's former president, sacked at the same time Drury
retired. Drury, who was quite ill, and Proto were thought to have
"personally" benefited from "deals with Eastern's
chairman, Louis Paolino." In this alleged scam, in the autumn of
1995, Paolino, then a vice-president of USA Waste, joined with several
others to buy out Eastern Environmental; they took control of Eastern in
1966 and began "a systematic accounting fraud which caused the
operating performance of Eastern to be regularly and materially
overstated." (71)
Reflections
Two main methodologies have long characterized the U.S. waste
industry: property rights and predatory pricing. (72) Nearly all the
firms, from those controlled by organized crime to the Giants, have been
guilty of one or both of these offenses. In addition, they have all been
guilty of recklessly dumping toxic waste into leaky landfills and faulty
incinerators. (73) Every one who understands the waste industry knows
this. Even a generally sympathetic story in Fortune magazine about BFI
noted that its reputation in the 1980s was odious. The magazine
described the company as "entangled in price-fixing and pollution
cases from Louisiana to Niagara Falls." A New York State
congressional report held BFI's methods to be virtually the same as
those used by "organized-crime carters." (74) This statement
was only partially accurate, however. The Giants were addicted to
national and international expansion--Waste Management operated in Saudi
Arabia as early as the 1970s--while the sway of the various crime
cartels in waste was local or regional. The few mob firms seeking
landfills much further afield were usually knocked about by
citizen's environmental groups and, from time to time, state law
enforcement. Local papers, often in rural Midwestern or Appalachian
counties, had a field day printing stories about how the New York Mafia
was invading their town or county. The value of a "bad
reputation" was not very useful when it came to expansion outside
the Northeast, with an occasional exception.
The organized crime companies did not go public; they sold no
stock. Their companies were, to put it mildly, closely held. This was at
least partially done to keep their books from the prying eyes of
outsiders. Although some profited greatly from their business acumen,
they also had a penchant for stealing worker's benefits from their
controlled Teamster locals. Thus, they could never match the kind of
capital that the Giants routinely raised. Waste Management and BFI were
public companies; their stock was traded on the Exchange. The
gangsters' forte was more along the line of extortion, and they
lived in a perilous environment of their own.
The Giants were ruthless in their zeal for growth. They were very
aggressive when accused of criminal behavior and were not at all
reluctant to sue critics for besmirching their good names. Their
executives did not have "rap sheets." Predatory pricing was
their main methodology and that meant antitrust violations. No one,
except the victims, equated those sorts of activities as examples of
real racketeering. Even in the two examples of the past flirtations of
USA's affiliates with Third World despots to unload their toxic
products at bargain basement prices, little reaction was aroused.
Indeed, scarcely anyone in the U.S. knew anything about Jacobs'
activities in Benin, his Gibraltar company, or his alter ego SESCO.
Moreover, no one in authority raised much of an eyebrow over what must
have been significant connections between Eastern's current
officers and the firm that dumped ash in Haiti, so long as Eastern paid
a large portion of the cleanup. (75)
NOTES
(1.) Originally presented at the Second International Conference
for Criminal Intelligence Analysis, "Assessing Tomorrow's
Challenges Today," sponsored by the Royal Institute of
International Affairs, National Criminal Intelligence Service, Interpol,
London, England, March 1999.
(2.) U.S. Senate Select Committee on Improper Activities in the
Labor or Management Field, Hearing: Organized Crime in the New York
Private Carting Industry (Washington, D.C.: Government Printing Office,
1957: 6672).
(3.) Alan A. Block and William J. Chambliss, Organizing Crime (New
York: Elsevier, 1981: 14-15).
(4.) Donald Reid, Paris Sewers and Sewermen: Realities and
Representations (Cambridge, Mass.: Harvard University Press, 1991:
169-170).
(5.) Maurice D. Hinchey, Chairman, the New York State Assembly
Standing Committee on Environmental Conservation, Criminal Infiltration
of the Toxic and Solid Waste Disposal Industries in New York State
(Albany, NY: September 13, 1984); also Alan A. Block (ed.), The Business
of Crime: A Documentary Study of Organized Crime in the American Economy
(Boulder, CO: Westview Press, 1991: Chapter 7; 175-196).
(6.) John R. Coppola, Vice President, All County Service
Corporation, "Application to Dispose of Solid Waste at the Orange
County Solid Waste Disposal Facilities" (October 24, 1974).
(7.) New York State, Senate Select Committee on Crime (July 7,
1980: 51 cool ; Robert Mongelli, I.S.A. in New Jersey, Town of Wallkill,
"Application for Garbage and Refuse Permit" (December 13,
1981, January 16,1984); Joseph Mongelli, I.S.A. in New Jersey, Town of
Wallkill, "Application for Garbage and Refuse Permit" (1983).
(8.) See Vic Wehnan, Environmental Conservation officer, to David
Archibald, New York State Department of Environmental Conservation,
Memorandum (May 12, 1980).
(9.) Robert A. Mongelli, Grace Disposal and Leasing, Ltd., New York
State Department of Environmental Conservation, "Application for
the Operation of a Solid Waste Management Facility" (February 18,
197 cool .
(10.) Robert Mongelli, Orange County Sanitation, Town of Wallkill,
"Application for Garbage and Refuse Permit" (December 22,
1980, December 17, 1981, 1983, January 16, 1984).
(11.) Joseph Mongelli, President, Round Lake Sanitation
Corporation, "Application to Dispose of Solid Waste at the Orange
County Solid Waste Disposal Facilities" (August 2, 1974); Robert
Mongelli, Round Lake Sanitation Corporation, New York State Department
of Environmental Conservation, "Application for Septic Tank Cleaner
and Industrial Waste Collector Permit" (July 22, 1983).
(l2.) U.S. Congress, House of Representatives, Committee on
Interstate and Foreign Commerce (December 16, 1980: 63-64).
(13.) See "The Tuxedo Story: A Report from Chairman Maurice D.
Hinchey on Illegal Disposal of Wastes in the Hudson Valley, Pre-Hearing
Report of August 30, 1989" (p.4).
(14.) Ibid.: 3.
(15.) Gordon Bishop, Sunday Star-Ledger (April 8, 1979, Section
1:1 cool .
(16.) See my testimony on S & W in "On the Need for the
Waste Industry Disclosure Law" (Pennsylvania House of
Representatives, the Conservation Committee, Hearings on House Bill
2228, The Waste Industry Disclosure Law, February 15, 1990).
(17.) Superior Court of New Jersey, Burlington County, State of New
Jersey v. Christoper R. Grungo et al., Defendants, Criminal Action
XXVII, Law Division Docket No. SGJ-114-83-3, Burlington County
Courthouse, Mount Holly, New Jersey (April 22, 1985).
(18.) A few of the many investigations Hinchey conducted can be
found in "A Public Hearing into the Illegal Disposal of Wastes in
the Hudson Valley" (September 19, 1989); "A Private Hearing
into the Involvement of Organized Crime in the Waste Disposal
Industry" (September 6, 1989); "A Public Hearing into the
Illegal Disposal of Wastes and Landfill Problems in the Columbia County
Area" (March 14, 1990); and "Illegal Dumping in New York
State: Who's Enforcing the Law?" (February 6, 1991).
(19.) See the report from Chairman Maurice D. Hinchey to the New
York State Assembly Committee on Environmental Conservation Concerning
illegal Disposal of Wastes in the Hudson Valley (February 6, 1991,
Appendix C) for Sacco's arrest record, and "The Tuxedo
Story," PreHearing Report of August 30, 1989 (p. 7).
(20.) Ibid.: 53-54.
(21.) Ibid.: 6.
(22.) Author's interviews with FBI Special Agent Jerry W.
Hanford, the coffee drinker, working out of the Bureau's White
Plains Office.
(23.) Lisa W. Foderaro, "New York Trash Haulers Charged with
Bribery and Payoffs to Mob" (New York Times, October 9,1991).
(24.) United States Attorney, Southern District of New York,
"Outline of Indictment: United States of America v, Mongelli"
(Press Release, October 8, 1991).
(25.) U.S. House of Representatives, Committee on Energy and
Commerce, Subcommittee on Oversight and Investigations, Report:
Hazardous Waste Enforcement (Washington, D.C.: Government Printing
Office, December 1982: 21).
(26.) Ibid.: 22.
(27.) Ibid.: 24.
(28.) United States District Court for the Eastern District of
Pennsylvania, "Cumberland Farms. Inc. et al. v. Browning-Ferris
industries, inc. et al., Master File Civil Action No. 87-37 17, 120 F.
R. D. 6421 1988 U.S. Dist. LEXIS 7484; filed July 21, 1988.
(29.) United States District Court, Eastern District of
Pennsylvania, Cumberland Farms, Inc., et al., Plaintiffs v. Browning
Ferris Industries, Inc., et al., Defendants, Plaintiffs' Memorandum
in Opposition to Defendants' Motion for Summary Judgment, Master
File, No. 87-3717, page 1.
(30.) Ibid.: 53.
(31.) Ibid.: 2-3.
(32.) Ibid.: 6.
(33.) Ibid.: 7.
(34.) See, for example, Brian Larkin, "Probers Charge Bribes
Opened Landfill's Gates," Staten Island Advance (June 16,
1994:1).
(35.) United States District Court, Eastern District of
Pennsylvania, page 22.
(36.) Ibid.: 13.
(37.) Ibid.: 15.
(38.) Ibid.: 16.
(39.) Ibid.: 23.
(40.) Ibid.: 94.
(41.) Howard Smith, "Hidden Graves: Predatory Pricing and
Organized Crime" (Ph.D. dissertation, Pennsylvania State
University, 1999: 107).
(42.) Larry Carpenter, Undersheriff, Ventura County, California,
Sheriff's Department, "Waste Management Report"
(Attachment 4, September 20, 1991: 5).
(43.) J. Richard Shaner, "Cumberland Farms: Is It Changing
Identities?" (National Petroleum News 80,11, October 1988: 66).
(44.) "Justice Department Sues Cumberland Farms for Wetlands
Violations" (Business Wire, January 7, 1991).
(45.) Associated Press (August 20, 1991).
(46.) National Petroleum News (April 1993).
(47.) James Norman, "Goldman Wins $21 Mil Suit over Cumberland
Theft" (Platt's Oilgram News (75,98, May 21, 1997:1).
(48.) Peter Gullage, "Come-By-Chance Refinery Vows to Cut
Emissions" (Platt's Oilgram News, August 5, 199 cool .
(49.) Superior Court of the State of New York, County of New York,
Robert M. Morgenthau, District Attorney of New York County,
Plaintiff-Claiming Authority, against Frank Alloca, VA Sanitation Inc.,
et al., Order to Show Cause and Temporary Rest raining Order with
Supporting Papers (CPLR ART. 13-A), June 19, 1995.
(50.) Philip S. Angell, "Cleaning Up New York"
(Infrastructure Finance, May 1, 1997).
(51.) Steve Daniels, "BFI Purchases Midsize New York City
Hauler" (Waste News, March 17, 1997: 2).
(52.) "Houston-Based USA Waste Services to Acquire Waste
Management" (Duluth News Tribune, March 12, 199 cool .
(53.) Ibid.
(54.) Forbes (June 2, 1997).
(55.) Solid Waste Report (May 11, 1995).
(56.) "Waste Management Completes Eastern Deal"
(Greenwire, January 4,1999).
(57.) See the Miami Herald and the Associated Press (January
1,1999).
(58.) Jim Roberts, "Investors Welcome Micro Warehouse, United
Waste IPOs" (Fairfield County Business Journal, December 28, 1992,
Sec. 1:1).
(59.) Ibid.
(60.) State of Delaware, 1982 Annual Franchise Tax Report, Amerex
Oil Associates, Inc., File Number 8590-3 8, filed February 3, 1983.
(61.) "Corporate Facts: United Waste Systems Inc."
(Hartford Courant, September 25, 1995, Business Weekly Section: 4).
(62.) "Nigeria" (Platt's Oilgram News, February 28,
1983:3).
(63.) "Companies" (Oil and Gas Journal, March 7,1983:46).
(64.) Journal of Commerce (December 28, 1987).
(65.) "Saga Protests Benin Ouster: Creditors Losing $60
Million in Offshore Venture" (Platt's Oilgram News, September
16, 1985: 1).
(66.) James Ridgeway, with Gaelle Drevet, "Dumping on Haiti:
How Thousands of Tons of Philadelphia's Toxic Waste Ended Up on a
Haitian Beach and What the City of New York Is Doing About It" (The
Village Voice, January 13. 199 cool .
(67.) Ibid.
(68.) Ibid.
(69.) Ibid.
(70.) "Waste Management Lawsuit Alleges Fraud by Acquired
Firm" (Philadelphia Inquirer, January 1,2000, at
www.phillynews.com/inquirer/2000/Jan01/business/EASTERNo1.htm).
(71.) Ibid.
(72.) In a twist, BFI's fear of predatory pricing actually
haunted its first attempt to enter the Greater New York market. In
Suffolk County, Long Island, three towns--Babylon, Huntington, and
Islip--joined together in the 1970s to create the Multi-Town Solid Waste
Authority. The goal was to develop a resource-recovery facility. BR
applied to construct the facility and made the short list in 1980.
BFI's inclusion likely stemmed from the activities of Anthony A.
Boccaccio, who was an engineer with Grumman at the same time he worked
in "public relations" for Multi-Town. The Grumman connection
was important, for Grumman's Energy Systems held the license for
the German VKW mass-burning technology system. Grumman decided to close
down this division and sold the license to BFI. The royalty agreement
gave Grumman the right to receive a fixed percentage on any contract BFI
successfully negotiated using the license. Had this project worked,
Grumman would have earned over two million dollars. In 1982, Multi-Town
selec ted BFI's subsidiary, Energy Systems, to build the plant. The
entire project was destroyed by political corruption in various
quarters, although it took Anthony Noto, who became a Babylon Town
supervisor in 1982, to finally do it in. Without bothering to notify
anyone, Noto hired an Albany firm with no prior experience to provide
the technology for the plant. Noto failed at every important task and
made BFI "spend thousands of dollars in overtime for engineers,
attorneys, and accountants." There is no doubt that Long
Island's organized crime carters were afraid of BFI's
reputation for predatory pricing, which they believed had just been
employed in upstate New York. They made sure it would not get any kind
ofa stake on Long Island. State of New York, Commission of
Investigation, The Multi-Town Solid Waste Management Authority and the
Crisis of Solid Waste Management (270 Broadway, New York, NY, October
1984: 60, 73).
(73.) See Alan A. Block, "Into the Abyss of Environmental
Policy: The Battle over the World's Largest Commercial Hazardous
Waste Incinerator Located in East Liverpool, Ohio" (Journal of
Human Justice, November 1993).
(74.) Richard Behar, "Talk About Tough Competition: How Bill
Ruckelshaus Is Taking on the New York Mob" (Fortune, January 15,
1996: 93).
(75.) Many other toxic waste polluting companies exist beyond those
mentioned here. The oil industry seems to breed them. Some important
waste oil firms, fuel oil distributors, retail gas and diesel station
owners, and owners of fuel terminals have been major-league polluters.
Many sell product laced with flammable toxics, while others pollute
through negligence or deliberately to keep costs down. Additionally,
ship-based oil pollution spreads a host of toxic chemicals. There are
some 100 to 200 identified carcinogens in every 10,000pounds of oil
released into the oceans. Spills have the immediate effect of killing
waterfowl and mammals. Even more insidiously dangerous, the carcinogens
disrupt the food chain because oil pollution kills the coastal
phytoplankton that feed commercial fish, thereby causing a reduction on
in harvests. The organisms that survive "introduce the oil toxins
into the food chain as they are consumed." See Paul S. Dempsey,
"Compliance and Enforcement in Environmental Law: Oil Pollution of
the Marine Environment by Ocean Vessels" (New Journal of
International Law and Business 6, 1984: 459-460).
Cruise ships are notorious oil polluters. Their crimes were
uncovered this decade. In 1994, the U.S. Coast Guard detected a huge oil
slick trailing after the world's largest cruise ship, Royal
Caribbean's Sovereign of the Seas. A four-year investigation
determined "a fleet-wide conspiracy within Royal Caribbean Cruises
Ltd. to save millions of dollars by dumping oily wastes into the
sea" (Ibid.). Even after Royal Caribbean paid a nine million dollar
fine in June 1998 and said it would never happen again, it did happen
one month later. Royal Caribbean's Nordic Empress dumped oily
wastes and attempted to hide the fact by creating false records. To
defend itself, Royal Caribbean's lawyers boldly claimed, "a
private company doing business in the United States was immune from
criminal prosecution because its ships fly foreign flags" (Douglas
Franz, "Gaps in Sea Laws Shield Pollution by Cruise Lines,"
New York Times, January 3, 1999: 1). Royal Caribbean's ships are
registered in Liberia. Helping Royal Caribbean make this case were
former U.S. Attorneys General Benjamin R. Civiletti and Elliot L.
Richardson, Royal Caribbean also took on board William K. Reilly, a
former head of the Environmental Protection Agency. He was hired, Royal
Caribbean said with a straight face, to help implement a new
environmental compl iance program (Ibid.). Civiletti and Richardson
should have been chagrined when the Nordic Express discharge was
discovered, as it followed their courtroom performances in defense of
Liberian registry (Ibid.).
ALAN BLOCK is Professor of Jewish Studies and Administration of
Justice, Pennsylvania State University, 103 Weaver Bldg., University
Park, PA 16802 (e-mail: aab5@psu.edu).
