By Ray Stern
By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
Top Waste Management officials say they were shocked to learn the company is paying for lawsuits to stop a would-be competitor. Indeed, company spokeswoman Sarah Simpson thanked New Times for bringing the payments to the company's attention.
"You did a really good thing -- you really did," Simpson says. "This has gotten people's attention. We have to take action on this."
Not yet. As of press time -- and nearly a month after New Times' first inquiry -- Howard Shanker was still at the Waste Management trough.
The company's tactic of paying bills for groups that fight the company's competitors isn't without precedent.
Ten years ago, the company paid for a $60,000 seismic study used by a community group near Los Angeles to argue that reopening a landfill owned by a competitor could prove an environmental disaster if an earthquake struck. The community group presented the study to regulators as its own. The story caused a sensation when it hit the front page of the Wall Street Journal in 1996, prompting the Los Angeles Board of Supervisors to pass a law requiring that funding sources be identified when studies are presented to regulators.
Waste Management has sought to limit competition in other ways. Since its inception in 1968, the company has been sued at least 23 times for antitrust violations in as many states, paying settlements and fines totaling more than $23 million.
The company was also a bad boy in stock scandals of the 1990s, admitting in 1998 that it had inflated earnings and overstated assets by $3.5 billion starting in 1992.
All this is just so much history, according to the company, which replaced its board of directors and CEO four years ago. In a 2000 letter to stockholders, newly installed CEO, president and chairman of the board A. Maurice Myers boasted that the company had implemented an ethics code, complete with a toll-free hot line so that employees could report concerns or seek advice on unethical conduct, violations of law or breaches of company policy.
According to its most recent annual report, Waste Management's emphasis on clean business practices hasn't wavered -- Myers in an introductory letter to the report brags about a company "steeped in integrity and impeccable ethics."
The message didn't get through to a manager in Arizona -- whom Simpson won't name -- who the company says agreed to fund the lawsuits.
"You're always going to have some people who still resort to the old ways of doing business," Simpson explains. "But we're slowly getting to those folks and showing them that that's not acceptable anymore and that's not the way this company's going to do business."
Simpson says the payments shouldn't have happened.
"I can tell you for certain that this is not company policy or procedure," she says.
"We do not advocate engaging law firms for groups and then having the company fund that. If we have an issue with a county or a competitor and we want to file a suit, Waste Management is going to do that and be front and center in that suit. There is a real zero-tolerance for anything that is in violation of our company's code of conduct or ethics."
But that doesn't mean Waste Management will pull the plug. Simpson says the company will stop direct payments to Shanker, the plaintiffs' lawyer, but she and Duane Woods, general counsel for Waste Management's western division, say the company will likely continue giving money to the Mobile community council, which can then pass it on to Shanker.
Simpson says the community council approached the company about filing suit, not the other way around. "I think this is a request where the community said, 'Hey, we need your help,' and the company said, 'Yeah, we're there for you,'" Simpson explains. "It also happened to, you know . . ." She interrupts herself with a slight laugh, not finishing the thought. Jason Barney, project manager for Southpoint, can finish it for her.
Barney says Waste Management's funding of lawsuits shows the company hasn't changed its ways.
"They've got a history around the country of taking a monopolistic situation in the market and using it to their advantage to raise prices," he observes. "I think that [paying legal bills] substantiates why we're doing this project. Waste Management recognizes there's a need for it, and a need to drive out competition."
With Waste Management paying the freight, dump opponents sued the county in state court last year, claiming that the Maricopa County Board of Supervisors didn't muster the necessary two-thirds vote needed for a rezone that made the new dump possible. Maricopa County Superior Court Judge Cathy M. Holt rejected that argument in a decision filed May 17.
Opponents, including the Maricopa County chapter of the NAACP, the Maricopa Community Council for Progress (the majority of whom are white) and a dozen black property owners, have also sued the county in federal court, claiming the board of supervisors engaged in environmental racism by allowing a new dump in an African-American community that's already saddled with three landfills.
But proving that Mobile is black isn't easy.
In a letter sent last summer to Governor Janet Napolitano, NAACP officials, citing a census block where nine of 16 residents are African American, claim Mobile's population is 60 percent black. However, U.S. census data show that slightly less than 22 percent of the 64 people who live within three miles of the proposed landfill are black. The percentage plummets to less than 2 percent for the zip code that includes Mobile and the burgeoning housing developments in Maricopa. Dump opponents know these numbers all too well.