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#99 - Waste Management Accused Of Gangster-Style Death Threats Against New Orleans Officials, 16-Oct-1988

Waste Management, Inc. (WMI), the nation's largest and least law
abiding waste hauler, reportedly raised the stakes last week for
citizens who oppose their operations. According to the TIMES-PICAYUNE,
the largest newspaper in New Orleans, Louisiana, representatives of
Waste Management told two high-level New Orleans city employees that
they would "wear cement boots" and would "meet their maker" if they
continued to investigate alleged overcharging of the city by the waste
hauler.

According to the TIMES-PICAYUNE Oct. 7, 1988, pg. B1, the New Orleans
Superintendent of the Department of Sanitation, Cecil McFarland, and
his supervisor, Sanitation Director Pat Koloski, reported the gangster-
style death threats to the City Council at a public meeting Oct. 6.

HWN interviewed City Councilperson Peggy Wilson, who confirmed that she
had heard Mr. McFarland make the charges: "I said to him, 'Are you
saying Waste Management threatened your life?' and Mr. McFarland said,
'Yes, that's what I'm saying.'" According to TIMES-PICAYUNE writer
Frank Donze, who covered the City Council meeting Oct. 6, "Koloski
confirmed that the threats were made but neither he nor McFarland would
discuss who made them."

HWN interviewed Cecil McFarland, a man in his mid '30s, at his city
office in New Orleans Oct. 7, and asked him who in Waste Management had
made the death threats. Mr. McFarland told us he had just finished
testifying before a federal grand jury an hour before we met with him,
and he said he was under orders not to speak about the matter. Mr.
McFarland appeared nervous and shaken during our interview. He politely
but firmly declined to answer any questions related to the death
threats. He did confirm that the city had been dumping its garbage at a
landfill owned by Waste Management since 1976.

According to the TIMES-PICAYUNE, Mr. Koloski, and Mr. McFarland had
been holding a series of meetings with representatives of Waste
Management to discuss alleged overcharging of the city by the waste
hauler. A report issued by the office of New Orleans Mayor Sidney
Barthelemy earlier this year alleged that Waste Management had
overcharged the city in at least the following ways:

charging the city for disposal or garbage from other parishes;

billing the city twice for some loads of trash;

weighing truck drivers and their helpers along with the trash; the city
pays for trash disposal by weight.

According to the TIMES-PICAYUNE, Charles Dees III, Waste Management's
regional vice-president, said his company had cooperated throughout the
inquiry, and he said there is no evidence to support Mr. Koloski's and
Mr. McFarland's charges.

According to Sanitation Director Koloski, the overcharging may have
amounted to as much as $2 million over the 12-year period since 1976,
when the city began dumping its garbage at the Recovery 1 landfill,
owned and operated by Waste Management.

During the past two years, the city has privatized garbage collection
and American Waste and Pollution Control has won the contract to
provide pickup throughout the city. American Waste is a subsidiary of
Waste Management.

Mr. McFarland was appearing before the Council Oct. 6 partly to protest
the city's failure to investigate fully Mr. Koloski's earlier charges
that WMI had overcharged the city during a 12-year period. The city had
asked a certified public accountant, Deloit, Haskins and Sells, to
investigate one year's worth of dealings between the city and WMI. The
accounting firm reported finding only $2800 in erroneous charges. The
city's chief administrative officer, Kurt Steiner, said he had ordered
an investigation of only one year's dealings with WMI because WMI had
only been picking up city garbage for that long. He said, "We had to
start somewhere and we do intend to review transactions in prior
years."

Sanitation Director Pat Koloski appeared before city council recently
to request review of 12 years of records, which he said would show that
WMI had overcharged the city by as much as $2 million. The TIMES-
PICAYUNE reported that immediately after Mr. Koloski made his charges,
the FBI subpoenaed city records dating back to 1976 and ordered
delivery of the records to the grand jury Oct. 7, the day Mr. McFarland
appeared before the grand jury. Robert Boitman, an attorney on the
staff of John Volz, federal district attorney in New Orleans, would not
confirm or deny for HWN that a grand jury is investigating Waste
Management and/or the alleged death threats against city employees.
City councilperson Peggy Wilson told us that the matter was out of
Council's jurisdiction now that criminal charges might be involved, and
she said she believed the federal district attorney's office would be
investigating the death threats.

Waste Management has recently pleaded guilty or no contest in other
jurisdictions to charges of illegal price-fixing and bidrigging. In
Fort Lauderdale, Florida, on January 15, 1988, WMI was fined $1 million
after pleading no contest to a federal charge that it illegally
controlled competition among garbage haulers in Broward County, FL, the
Ft. Lauderdale SUN-SENTINEL reported Jan. 16, pg. 1A. Justice
Department attorney James Griffin said the company and other unnamed
haulers drove up prices of garbage collection by refusing to bid
against each other for contracts. The practice cost consumers "millions
of dollars," according to court records. Three days earlier the waste
giant was fined $725,000 in a Florida court for damages and penalties
stemming from separate charges that it fixed prices and rigged bids in
Dade County, Florida, according to the SUN-SENTINEL Jan. 13, 1988, pg.
3B. Both cases involved a wholly-owned subsidiary called Waste
Management of Florida. Waste Management, Inc., has itself organized
into at least 772 subsidiary corporations to minimize the parent
company's liability.

The SUN-SENTINEL on Jan. 13, 1988, quoted Jerome Hoffman, who heads the
antitrust division within the office of Florida's attorney general,
Robert Butterworth, saying that Waste Management and other garbage
haulers had been charged with price-fixing in a civil suit by a group
of south Florida businesses and that the case was about to be settled
for $2 million. To our knowledge, no such a settlement has ever been
announced.

--Peter Montague

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Descriptor terms: wmi; death threats; property rights; violence; la;
new orleans, la; price fixing; bid rigging; fraud; violations; bfi; fl;
investigations;