The state Attorney General's Office raised serious questions seven years ago about the legality of the Ensco bid to run Arizona's hazardous-waste dump in Mobile, but dropped the inquiry after getting heat from the agency in charge of the dump, New Times has learned.

A secret 1983 memo, written by former assistant attorney general Jon Wactor, outlines several possible improprieties stemming from the bid itself and the manner in which it was solicited by state officials. The memo, which state officials have balked at releasing to the public, says the validity of the contract might be open to legal challenge because of irregularities surrounding the bidding process.

The state Department of Health Services, then in charge of the project, went ahead with the deal anyway. DHS subsequently signed an agreement allowing Ensco to operate a dump near Mobile, and to build a hazardous-waste incinerator. The agreement was later expanded to allow Ensco to build two additional incinerators.

Construction of the facility, to be owned by the state, is nearing completion and it could be ready for operation within a year. Officials in the Attorney General's Office and the state Department of Environmental Quality (DEQ), which now oversees the Ensco contract, declined repeated requests last week to release the memo, each saying his agency needed to consult with the other. (DEQ director Randy Wood was said to be conferring with the governor's office late last week about how to respond to the requests.) However, both agencies confirmed the existence of the memo, and New Times confirmed its contents through other sources.

Wactor, who subsequently left Arizona and took a job with the Environmental Protection Agency, also declined to comment, citing attorney-client privilege.

However, New Times has learned that Wactor wrote the memo after he discovered that Ensco and another interested firm, BKK Incorporated, had received inside information from DHS officials on the bidding. Prior to the close of bidding in February 1983, the two companies were alerted by Norm Weiss, the DHS official in charge of the project, that none of the seventy other companies solicited for bids intended to respond.

Weiss encouraged Ensco and BKK to complete and submit bids and subsequently flew to Dallas to pick up Ensco's bid a few hours before the deadline elapsed. "Weiss' boss, Bruce Scott, went to Sky Harbor to pick up the BKK bid, so they could say both bids were in the hands of a DHS official before the deadline," says a former DHS employee close to the project. "BKK could've made the deadline without DHS help, but Ensco could not have."

Wactor said in the memo that the two bids, the only ones submitted on the facility, might be invalid because they did not meet the needs outlined in the state's request for proposals. The memo contends that Ensco was unable to show that it could make a profit running the original facility, which did not include an incinerator.

Ensco won the bidding because it promised to be aggressive in seeking recycling and other high-tech alternatives to land disposal, and because its sole competitor, BKK, faced extensive legal and environmental problems at existing hazardous-waste dumps in California, DHS officials said at the time. However, Ensco and state officials later cited lack of profitability as the justification for expanding the Mobile facility to include an incinerator, which is expected to handle toxic PCB wastes trucked into Arizona from all over the country.

The Ensco and BKK bids also ignored the question of who would construct a multimillion-dollar paved road to the site, another key issue affecting the project's profit margin, the Wactor memo says. DHS officials subsequently persuaded the state legislature to use taxpayer money to pay for the road, letting Ensco off the hook.

Wactor's memo also said DHS' Norm Weiss acted improperly in leaking information about other bidders' plans and in lending personal assistance, albeit at state expense, to help Ensco beat the deadline.

Weiss, now assistant director of DEQ in charge of waste projects, confirms that he contacted Ensco and BKK prior to the deadline and flew to Dallas where he met an Ensco representative in the airport. But he denies that he talked them into submitting bids when it appeared they would face little or no competition.

"The reason their bids were so late coming in is because the state's request was rather complex," Weiss says.

Weiss contends that the issues raised in Wactor's memo were examined and discounted by a second assistant attorney general. "Wactor raised the question, `We need to find out was this consistent with the law,' and [Wactor's supervisor] Fred Stork did that and found no problem."

Attorney General Bob Corbin, however, says his office has been unable to locate a written response to Wactor's memo. "We've torn this office apart and we can't find anything," Corbin says. "Fred apparently doesn't remember if he wrote anything down--it may have been verbal. He and another attorney did look at the memo, however, and both did not feel it was a violation of the law."

Stork says he recalls reviewing the memo, but he declines to discuss his reasons for approving the DHS' handling of the Ensco deal. "At the appropriate time, provided the state agrees, I'll be happy to discuss my reasoning with you," Stork says.

According to a source close to Corbin's office, assistant attorney general Steve Twist, Stork's boss, allowed the inquiry to die quietly under pressure from Donald Mathis, then head of the state Department of Health Services, which managed the project before DEQ was established in 1986.

"Mathis stormed into Twist's office and slammed down the letter, saying, `When I want your advice, I'll ask for it,'" recounts the source. "After that, Twist just put the letter aside and it was eventually filed away." Mathis and Twist both say they do not recall a confrontation over Ensco. "It was a long time ago," Mathis says. "I remember several such encounters with Twist, but I have no recall of one involving Ensco." Twist, now a candidate for attorney general to succeed the retiring Corbin, says he does not recall being aware of the Ensco memo at the time, or getting grief from Mathis about it.

"It sounds like Don Mathis, it brings back memories, but I don't recall that specific incident," Twist says.

Environmentalists, who have amassed unprecedented public opposition to the Ensco project in recent weeks, expressed shock at learning of the circumstances surrounding Ensco's bid seven years ago.

"I'm speechless, I'm just floored," says Joni Bosh of the Sierra Club. "I've worked for a company with state contracts, and you don't deviate one word--not one word--from the bidding rules, or your bid'll be thrown out.

"I can't believe they went ahead with [the project] after their attorney raised these concerns. They simply must release that memo and give a full accounting."

In 1983, at the time of the recently discovered memo, most environmentalists supported the project because they believed it would eliminate illegal hazardous-waste dumping in the desert. Now, however, such groups as Greenpeace and the Sierra Club are vehemently opposing the impending opening of the plant. Only a handful of politicians expressed reservations about the project at the time, despite the fact that, as early as 1985, the plant was expected to treat mostly toxic wastes shipped to Arizona from other states.

TIKI OR LEAVE IT ... v6-06-90

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Kathleen Stanton