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Browning-Ferris Industries (BFI) has the distinction of being the first garbage company to expand across North America.⁽¹⁾ BFI was the vision of Tom Fatjo, a shrewd businessman who turned his small garbage business in Houston into the BFI of today. It all started in the 1960's when Fatjo, unhappy with his local garbage hauler, started his own company, launching BFI into the garbage world and the New York Stock Exchange.⁽²⁾

In order for BFI to grow and succeed, the plan was simple: achieve domination of a major portion of the national waste flow; the key to profits being control of disposal capacity through landfill banks. City by city, hauler by hauler, BFI acquired companies. From Louisiana to Canada, BFI gave local haulers deals they could not pass up. They offered larger salaries, the option of staying on with the company, and BFI stock. The common method of acquisition consisted of independent haulers taking stock in BFI in exchange for control of their companies. The lure of riches was too good to pass up and company after company sold out to BFI. ⁽³⁾

From 1969 to 1970, the company grew rapidly, and overtook twenty different markets. In these acquisitions, there were five companies owned by Harry Phillips, a garbage hauler who had markets in Memphis, Houston, and Puerto Rico. Phillips was later hired as the expanding company's Chief Executive Officer. ⁽⁴⁾ BFI entered markets throughout the 1970's from San Francisco to Boston. In 1971, BFI combined with the National Disposal group of companies to gain access to the markets of Chicago. BFI also obtained a liquid waste facility, chemical plants, and Consolidated Fibers, Inc.(CFI), one of the three largest scrap paper dealers in the U.S. ⁽⁵⁾ In 1976, Fatjo left the company to form an investment consulting firm known as Criterion Capital Corporation. BFI's sales went from $28 million in 1969 to $308 million in 1977.  By 1980,  BFI boasted operations and subsidiary companies in a majority of U.S. states, along with overseas operations in Canada, Australia, the U.K., Puerto Rico, Western Europe and the Middle East. ⁽⁶⁾

In 1983, BFI moved into the hazardous waste disposal industry with its acquisition of CECOS and NEWCO, companies with troubled pasts. ⁽⁷⁾This time their acquisition strategy backfired as CECOS was plagued with numerous problems, foremost among them, their hazardous waste disposal sites in Niagara Falls, Williamsburg OH, and Baton Rouge, LA. ⁽⁸⁾ By the end of the 1980's, CECOS had dragged BFI's earnings down and Phillips offered his job to Bill Ruckelshaus, a BFI director and two time head of the Environmental Protection Agency. This move was viewed by commentators as an attempt by BFI to boost declining stock value by currying favor with Wall Street and to reverse the company's tarnished environmental image. ⁽⁹⁾ At the time of Ruckelshaus' ascension, one news story asked, "Can Mr. Clean Clean Up Browning Ferris?"
 
 

Problems/Violations

BFI and its subsidiaries have a long checkered past when it comes to both polluting the environment and dealing fairly with competition. BFI's violations range from illegal disposal of hazardous wastes to price fixing/anti-trust violations; and, state officials have pled guilty to accepting bribes from BFI. Recently, BFI compiled a ten-year history of their company and presented it to Pennsylvania's DER in response to questions about the company's integrity with regards to a proposed 154-acre landfill in Berks county. They admitted to the following: 270 civil penalties, administrative orders, permit or license suspensions and revocations, as well as bond forfeiture actions, 10 misdemeanor or felony convictions and pleas; 24 court decrees or settlement orders and one pending court case. ⁽¹⁰⁾ (It must be noted that this is merely covers the period from 1981-1991.) In addition, BFI and subsidiaries have disclosed more than $75.5 million in fines and settlements from 1972-1994. ⁽¹¹⁾ This is by no means a comprehensive list. Complete data concerning fines on numerous violations are simply unavailable. This data serves to illustrate the scope BFI's violations and its history of disregard for the law.
 

Anti-Trust/Miscellaneous Violations

BFI's violations in this respect tend to center on illegal attempts to take over/monopolize individual markets by forcing out competitors. In more than one instance, BFI and/or state officials involved with their permits or applications have plead guilty to, or paid penalties to settle charges of bribery.

• 1984: $3 million settlement to avoid inclusion in list of defendants being sued by NJ for price fixing and bribery of state officials. ⁽¹²⁾ 
•           Approximately $6 million out of court settlement with Conservation Management concerning a lawsuit by Conservation which alleged that BFI had        bribed a Texas state senator who was to help defeat Conservation's landfill application. ⁽¹³⁾
• 1985: $130,000 settlement with state of Georgia, concerning charges of price fixing, bid rigging and customer allocation designed to undercut competitors. ⁽¹⁴⁾
• 1987:Guilty plea and $1 million fine to the Dept. of Justice for price fixing and customer allocation conspiracy with WMI in Ohio and Michigan. ⁽¹⁵⁾
• 1988: $350,000 settlement with the state of Ohio, in Toledo to settle price fixing charges. ⁽¹⁶⁾
• $6.5 million civil court judgement in Burlington Vt., for anti-trust activities including predatory pricing.⁽¹⁷⁾
• 1989:A New Jersey grand jury indicted John A. Pinto (BFI regional vice president,1975-1981) for customer allocation and coercion in price fixing scheme from 1970-1984. In 1989, Pinto plead guilty and paid a $50,00 fine. Pinto continued to recieve $125,000/year until 1984 when he retired. "As set forth in testimony before the New York State Assembly Committee, Pinto clearly had ties to organized crime, and was appointed by and reported directly to, John Drury, BFI's president." ⁽¹⁸⁾
• 1990: $30.5 million out of court settlement resulting from a class action lawsuit brought by customers against BFI and WMI alleging price fixing and customer allocation. ⁽¹⁹⁾
• 1994: $4.2 million fine in Kane County. IL, for price fixing. ⁽²⁰⁾
• 1995: Texas state employee with The Natural Resource Conservation Commission pleads guilty to accepting a bribe from BFI in exchange for a favorable permit ruling. ⁽²¹⁾
• 1996: Settlement reached by BFI and WMI with Justice Dept. in Memphis Tenn., Georgia, Iowa and Louisiana for illegal contracts and other anti-trust violations. BFI agreed to stop the practices and no penalties were assessed. Concerning BFI's practices, the Justice Dept said, "BFI intentionally used restrictive contracts to inhibit competition and enhance its power over commercial customers" ⁽²²⁾

• 1998: BFI reached an agreement with the US Dept. of Labor. The company was cited for gender discrimination against 11 women who had applied for positions as truck drivers. The agreement included $213,754 in back wages and guaranteed employment for the women.⁽²³⁾
•            BFI reached a $682,000 settlement with the Solid Waste Authority in Contra Costa County Ca., considerably less than the fines of $1.5 million originally proposed by the Waste Authority.⁽²⁴⁾
•            BFI was sued by the federal Equal Opportunity Employment Commission in Pittsburgh Pa. The suit alleges that BFI discriminated against a job applicant because of his age, and that the company hired a younger, less qualified applicant.⁽²⁵⁾
•             BFI was fined $331,000 for missed pickups in Jefferson Parish, La.⁽²⁶⁾
• 1999: BFI paid Daughtery Township Pa, $800,000 to settle a lawsuit filed in federal court. The township had accused BFI of avoiding tax payments by illegally altering the manner in which it calculated gross receipts for a landfill. ⁽²⁷⁾

Environmental Violations

The Clarion Ledger, (Jackson Miss.) had this to say about BFI after concluding a ten month investigative report into environmental problems resulting from the company's waste disposal practices: "BFI's purring Cadillac could be more hearse then limousine" and "BFI and its analogs offer essential services.  BFI's role is not at issue: its performance is." ²⁸ (italics added)

• 1976: $200,000 statutory civil penalty in Texas for selling toxic waste sludge as oil to be applied to state roads. ⁽²⁹⁾
• 1985: $64,200 in fines paid to EPA for groundwater monitoring violations at Missoula, Montana hazardous waste landfill. ⁽³⁰⁾
• 1987: $23,000 in penalties for accepting inadequately protected radioactive waste at Beatty, Nev.⁽³¹⁾
•            $25,000 fine for an illegal landfill expansion in Randolph, Mass.⁽³²⁾
•            $200,000 for various violations at solid and bio-medical waste facility in Crescent Acres, LA. ⁽³³⁾
•            $104,000 in Hutchins Texas for failure to renew leachate discharge permit at solid waste landfill.⁽³⁴⁾
• 1988: $41,870 in penalties paid to State of Illinois and EPA for contamination of groundwater.⁽³⁵⁾
•            $150,000 in Randolph Mass. for landfilling more waste than permitted. ⁽³⁶⁾
•            $2.5 million in penalties paid to state and EPA for over 2,500 violations in Livingston, La., hazardous waste landfill. ⁽³⁷⁾
• 1990: $3.525 million in penalties paid in a plea bargain arrangement where BFI pleaded guilty to discharging hazardous waste into drinking water supplies in Williamsburg Ohio.⁽³⁸⁾
•            $1.55 million for over 1,400 violations at hazardous waste landfill in Calcasieu, La.⁽³⁹⁾
•            $659,000 in penalties to EPA for for failure to obey post closure monitoring requirements of solid waste landfill in South Brunswick NJ.⁽⁴⁰⁾
• 1989: $280,00 for non hygienic operating conditions at Crescent Acres, La., Solid/Medical Waste facility. ⁽⁴¹⁾
• 1993: $1.1 million settlement with state of California for the bay area's worst sediment spill ever, which resulted from a BFI landfill and severely damaged two streams. ⁽⁴²⁾
• 1996: Part of $11 million settlement in Johnson County KS., to clean up Doepke-Holliday landfill that had been used from 1950-1970 to store waste from homes, pesticides plants, oil refineries etc.⁽⁴³⁾
• 1997: $5+million in fines and restitution in West Chester, PA for illegal disposal of wastewater treatment sludge from 1989-1992. Previously, BFI had pled guilty to a 23-count indictment charging them with conspiracy, mail fraud, and Clean Water Act charges involving the illegal disposal of the sludge at five plants in Pennsylvania and Delaware by BFI Services West Chester waste hauling operation. BFI was ordered not only to pay $3 million, but restitution of $6.4 million to four wastewater treatment plants, as well as $1.5 million to organizations that handle environmental concerns of the PA/DE region.⁽⁴⁴⁾
• 1998: $1.5 million in penalties paid by BFI for violations of the Clean Water Act in Washington D.C. by its Maryland subsidiary. BFI admitted three criminal violations stemming from the release of wastewater contaminated with improperly treated medical waste. BFI corporate spokeswoman, Barbara Brescian said the company settled, "in the interest of putting this two year old situation behind us. BFI vigorously maintains our subsidiary committed no wrong."⁽⁴⁵⁾

Merger Mania and Executive Bonanza

1999 was a dramatic year for the major waste traffickers. The fruit of the recurring failure of the waste=profit equation on which the industry is built was even larger mega-corporations and riches for senior executives. ⁽⁴⁶⁾ As WMI succumbed to take over by USA Waste after repeated scrapes with the law and shareholder revolt, BFI also succumbed to its inability to live up to its own hype. In July, 1999, in a $9.4 billion sale, the Scottsdale, Arizona-based Allied Waste Industries swallowed giant BFI, ingesting enormous debt.⁽⁴⁷⁾  The scale of which locks this industry leader into the same old model of aggressively seeking to extract maximum profit in the shortest time from the environmentally most backward and socially oppressive means of managing wastes.

Little wonder Allied/BFI joined WMI in ganging up on Virginia whose General Assembly had passed "right to say no" laws limiting their import of out of state trash. In January, 2000, a federal judge ruled in the waste giants' favor, continuing to uphold the dubious notion that trash is an article of commerce like any other and thus protected by the Interstate Commerce Clause of the U.S. Constitution.⁽⁴⁸⁾
 

Organizing Tips

Check out our Generic Strategy Guide

Determine if your state has a "bad boy" law which prevents companies with felony convictions from opening landfills or other waste disposal operations.

Share Allied-BFI's background, (particularly its legal and environmental compliance history ) with media sources and encourage them to look into this.

With regards to landfills, determine the approved capacity of the landfill and attempt to determine if BFI is exceeding landfill capacity. (This seems to happen at BFI landfills fairly often: keep dumping while waiting for a landfill expansion permission or just overfill approved capacity.)

References

1. Crooks, Harold. Giants of Garbage. (Toronto: James Loimer,1993) p. 37.

2.Browning-Ferris Industries: A Corporate Profile. Citizens Clearinghouse For Hazardous Wastes, Will Collette, Brian Patterson, Brian Lipsett. July 1987, p. 1.

3.Crooks, Giants, p. 38.

4.Crooks, Giants, p. 38.

5.Crooks, Giants, p. 40

6.ibid, p.50, 58-59

7.ibid, p.59

8.ibid, p.59

9. ibid, p.59

10.Brown, Andrea S. "BFI, the Waste Disposal company has long record of fines, suits, penalties." Lancaster New Era, 7/27/92

11.Form C Compliance History: Browning Ferris Industries Inc. and Subsidiaries, filed with Commonwealth of Pennsylvania, Dept. of Environmental Resources, Bureau of Solid Waste Management, July 1, 1992.

12..Cumberland Farms, et. al vs. Browning Ferris Industries, Plaintiff's Memorandum in Opposition to Defendants' Motion for Summary Judgement, US District Court for the Eastern District of Pennsylvania, No. 87-3717, p.62, also see Chapter 7 "Derelict Conduct? Captive Markets and Class Action," in Crooks, Giants of Garbage., pages 146-166 for details about the largest private anti-trust lawsuit ever launched against the waste management majors.

13. ibid, p..66

14. ibid, pp.24-28.

15. ibid, p. 13.

16. ibid, p.13

17. ibid, p.69

18. ibid, p.61-62

19. Zuckerman, Laura, "Trash Talk:BFI," The Hutchinson News, 9/22/96. p. 13

20.Yip, Pamela, "Browning Ferris Hit with Anti-trust Ruling," The Houston Chronicle, 2/ 24/94.

21. The Dallas Morning News, "Ex-Panel Employee Given Probation" 7/1/95

22.. Conner, Charles, "BFI Sued Here on Monopoly Charges," Commercial Appeal 2/ 16/96, p.1

23. Turner, Missy. "Browning-Ferris Comes to Terms with Labor Department," The San Antonio Business Journal, 7/24/98

24. Schevitz, Tanya, "Free pickup for Garbage Customers Hit by Strike," The San Francisco Chronicle, 10/24/98

25. McKay, Jim. "Waste Hauler Sued by EEOC," Pittsburgh Post Gazette 10/1/98.

26.  Pompilio, Natalie, " Council OK's Waste Contract in Jeff; Recycling Costs Up 7cents a Month," The Times Picayune, 11/19/98

27. Pittsburgh Post-Gazette. 1/13/99

28. Crooks, Giants pp.53-54

29. ibid, p.54

30. Form C Compliance History: Browning Ferris Industries Inc. and Subsidiaries, filed with Commonwealth of Pennsylvania, Dept. of Environmental Resources, Bureau of Solid Waste Management, July 1, 1992 p.60.

31. Barette, Partial List of Fines and Convictions Imposed on BFI and Filials. 1995.

32. Form C Compliance History: Browning Ferris Industries Inc. and Subsidiaries, filed with Commonwealth of Pennsylvania, Dept. of Environmental Resources, Bureau of Solid Waste Management, July 1, 1992. p. 65.

33. .ibid, p.66

34. Barette, Partial List of Fines and Convictions Imposed on BFI and Filials.  1995.

35..Form C Compliance History: Browning Ferris Industries Inc. and Subsidiaries, filed with Commonwealth of Pennsylvania, Dept. OF environmental Resources, Bureau of Solid Waste Management, July 1, 1992. p. 73

36. ibid, p. 77

37. ibid, p. 124

38. ibid, pp. 47 and 126.

39.  ibid, p. 127

40. Barette, Partial List of Fines and Convictions Imposed on BFI and Filials. 1995.

41. Form C Compliance History: Browning Ferris Industries Inc. and Subsidiaries, filed with Commonwealth of Pennsylvania, Dept. of Environmental Resources, Bureau of Solid Waste Management, July 1, 1992 p.86

42. . "1.1 Million Settlement in Sediment Spill," The San Francisco Chronicle, 10/21/93.

43. "Companies Agree to Clean Kansas Site", Waste Treatment Technology News: " No. 7, Vol. 12, April 1, 1996

44.  Enviro-Bytes, The Environmental Protection Agency. "West Chester, PA company pays fines in disposal scam." Mid-Atlantic Region July 25, 1997.

45. Miller, Bill. "Firm to Pay $1.5 Million For Pollution Violations: Medical Waste Flowed Into Sewers," Washington Post, 6/2/98.

46. "A Year Best Forgotten," Waste News, 12/20/99 and Duff, Susanna, "Parachutes of Gold," 8/21/00

47. Brown., Bob, "Allied's stock tumbles," Waste News, 11/15/99

48. Duff, Susanna, "Judge Strikes Va. Import laws," Waste News, 2/7/00