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In a major national price fixing class action, the plaintiffs' exhaustive investigation revealed how despite WMI's (and BFI's) claims to the contrary both waste majors were in fact highly centralized operations. They had developed sophisticated accounting programs that allegedly enabled them to engage in predatory, monopolistic pricing in many different locations. "Discovery has confirmed that, far from being an aggregation of autonomous regions and districts, defendants' operations are highly centralized, with senior executives from corporate headquarters monitoring, controlling, dictating and enforcing pricing and marketing strategies, and virtually every important aspect of field operations."³ In September 1990, facing a stunning list of alleged misdeeds, WMI broke ranks with BFI and, without admitting any wrong doing, settled out of court for $19.5 million.⁴

Spokespersons for the company continued routinely defend the company's record by claiming that crimes it has been convicted of were committed by renegade employees violating company policy. Not everyone accepted this view of WMI's business practices. For example, in his 1992 report on WMI's criminal and civil record, San Diego district Attorney Edwin Miller noted that his office was unable to determine "whether Waste Management's history, as reflected by this report, has been due to a failure of proper management, or has been the result of deliberate corporate policy."⁵ 

In December, 1996, Federal Judge Odell Horton in the Western District of Tennessee issued an opinion ordering a WMI subsidiary to pay $91.5 million to a group of businessmen that claimed the company had cheated them. The judge's ruling held that Chemical Waste Management officers had engaged in a fraudulent scheme to "cheat [the] plaintiffs out of money." The judge added, "What is troubling about this case is that fraud, misrepresentation and dishonesty apparently became part of the operating culture of the Defendant corporation ... There was no reason for Defendant to undertake such conduct other than greed. "⁶ In so ruling, the judge may have answered the question raised by San Diego District Attorney Edwin Miller in his above quote.

On June 13, 1997 the Indiana Department of Environmental Management turned down Chemical Waste Management's application for a permit to operate a hazardous landfill in Fort Wayne, IN. IDEM Commissioner, Michael O'Conner stated "With Chem Waste's poor environmental track record, I could not approve their expansion request." Carl Miller, an associate attorney for the city of New Haven, IN remarked that the state "would have to grant a permit to Satan before they could grant a permit to this outfit."⁷

WMX was also under attack by activist shareholders George Soros and Robert Monks. In early 1997, the company announced it would change its name back to Waste Management and sell off many of its poorly performing international divisions. For a time, shareholders remained unconvinced and continued to press for reform. In February, 1997, Waste Management's new CEO, Phil Rooney, announced he would resign. Founding WMI CEO Dean Buntrock took up the post on a temporary basis while the company sought new leadership. This move apparently satisfied the renegade shareholders, but their fears for their investment remained warranted. Management consolidated WMI's ownership of other subsidiaries, taking over 100% of Wheelabrator.

One of the key questions that remained was: Could anyone reform a company with as tarnished a record as this? Some community groups decided enough was enough.

In November, 1996 several community groups from around various WMI's sites in Pennsylvania, in conjunction with the Community Environmental Legal Defense Fund, filed suit against the Attorney General of  Pennsylvania demanding that Pennsylvania initiate action to revoke the company's charter for continued systematic abuse of the privileges conferred upon the company by law. If such an action were to be taken, it would represent the ultimate sanction for a corporation; the death penalty. Unfortunately, this case was thrown out of court, but for many activists the fact that a felon waste trafficker like WMI qualified for the limited liability protections of an ordinary business was a scandal.

Despite all their P.R. hype about being on the cutting edge, WMI and its rival waste majors remain on the bottom rung of waste reduction technology. The industry is and always has based itself on a crude "more waste = more profit" business model. This translates into mass burial or incineration, not reduction and recycling. The name of the game is: Maximize your company's share of the national waste stream and bury it in company controlled landfills --- over the protests and basic rights of local communities. Mega-dumps earn more before tax income than all other waste company operations combined. But after three decades promoting itself to investors as the answer to the global waste crisis, the chickens came home to roost for WMI in 1998.  That year the industry leader --- apparently in all things including cooked books --- wrote off a decade's worth of inflated earnings reports:  A staggering $3.54 billion charge.⁸    This set the stage for a small fish to swallow a wounded barracuda. In 1998, USA Waste took over the much larger WMI. Then no sooner was the $20 billion merger under way, WMI was facing new SEC investigations and shareholders were alleging insider trading and fraudulent financial forecasts.⁹

Widespread public alarm over the state of the waste majors' finances saw the skies fill with golden parachutes.¹⁰  "The industry's 10 most highly compensated executives in 1998 were pushed out last year by long-term directors who gained millions through pay-outs from mergers and acquisitions, and, in a few cases, by seniors sales staff who exercised their options and fled the firm."¹¹ WMI's president Rodney Proto was among those pushed out in 1999, "following a string of damning events, including disappointing earnings, accounting mistakes, faulty financial forecasts, troubles integrating the two companies, and questions surrounding his insider trading."¹²   In 2000, 8 of the industry's 1999's top ten earners exited.

For the French multinational Vivendi, an bizarre corporate hybrid combining water, waste management and entertainment services, WMI's multi-billion dollar debt represented the chance to expand internationally and in the US. Its affiliate ONYX, a North American incinerator company, agreed in 2000 to buy WMI's Hong Kong operations and Mexican hazwaste facility, as well as WMI's US-based hazwaste treatment company AES.¹³

Eight public pension funds joined Louisiana School Employees' Retirement System to sue WMI. Their class action alleged senior WMI officers had cashed-in over $70 million of their own stocks before news of yet another huge profit shortfall sent share prices plunging.¹⁴  The SEC rapped WMI's knuckles in its June, 2000 order stating that the company fraudulently misled investors and stock market analysts.¹⁵  Waste News ran the following quote: "The waste industry has always been a cowboy industry. There has never been a standard."¹⁶

WMI's cowboys departed having done nothing much to alleviate the waste crisis other than enrich themselves. One industry observer claimed: "Turnover rates will affect stockholder confidence and draw down even further the falling prices of these large public firms, which will in turn jeopardize many 401 (k) and IRA accounts, which hurts us all."¹⁷   The illusion is that a "new" USA Waste-WMI represents a less perilous financial and ethically challenged model for managing society's wastes. But how could it be other than it has always been? For the corporate philosophy remains callous and unsustainable: overcoming the resistance of unwilling hosts (often rural, poor and minority) with unending rivers of urban and industrial wastes.

Record of Arrests and Prosecutions: The RAP Sheet on Waste Management 1970-1991

Record of Arrests and Prosecutions: The RAP Sheet on WMX 1991- Present

• December, 1991: Chemical Waste Management was fined $3.3 million for violations at its facility in Sauget Illinois.¹⁹

• October 15, 1992: Chemical Waste plead guilty and paid a record $11.6 million fine for 6 violations of environmental laws at a superfund site it was supposed to be cleaning up in Pennsylvania. As a result of the plea agreement, lawyers for the Department of Justice put in the record a letter stating that the company was really not guilty of doing anything really bad. Interestingly, this is the company's only actual "conviction" for an environmental crime.²⁰

• In October, 1994, a jury hit WMI with a $587,900 penalty. The money was awarded to a former whistle blower who worked at Chemical Waste Management's South Side Chicago toxic waste incinerator. He was fired after attempting to bring operating violations to the attention of WMI CEO Dean Buntrock. "They fired me for telling them what they didn't want to hear," says Jack Tursman.²¹

• In November, 1994, WMI paid $60,000 to settle a class action lawsuit charging improper cleanup and monitoring of groundwater contamination at Waste Management's GROWS landfill in Bucks County, PA.²²

• In March, 1996, WMX reached an antitrust settlement with the DOJ ending the use of "evergreen" contracts in several markets. These contracts are self renewing contracts which are allegedly in widespread use in the industry. There were no fines or penalties.²³

• In December 1996, a federal judge in Tennessee issued an opinion and court order requiring Waste Management's Chem Waste Management subsidiary to pay nearly $100 million in fines for their involvement in a fraudulent scheme. (See above) ²⁴

• On March 7, 1997, Glen Odell, project manager for WMI's proposed Rail Cycle project near Barstow, CA, was arrested on wire tapping charges. The company claimed that Odell is a "straight shooter," that they stand behind him, and the charges will be found "baseless."²⁵    The Rail Cycle situation is updated below.

• In October of 1997 it was revealed that 3 workers had died in separate accidents in 1996 at a Waste Management facility in Brooklyn, New York. The deaths and other safety violations resulted in almost $100,000 in fines and penalties against the company by OSHA. The New York Daily News which reported the deaths concluded: "The city wouldn't tolerate mob-run carting operations. And it shouldn't stand for firms that endanger workers." ²⁶ 

• In November of 1998, Waste Management agreed to pay a $125,000 fine to the state of Virginia for improperly disposing of medical waste. The company allegedly shipped medical waste from New York City to Virginia in trucks not approved to carry hazardous materials and then illegally disposed of the waste in a landfill in Virginia. ²⁷ 

• On December 14, 1998 Waste Management Inc. agreed to settle a class action lawsuit brought by shareholders by paying $220 million.  It is believed to be the largest securities class action settlement ever entered into by a single defendant.  The lawsuit alleged that WMI falsely inflated its stock prices and overstated earnings.  Sherie Savett, lead counsel in the litigation said of WMI's practices:" Waste Management overstated its income by 1.32 billion over an 8 year period.". "In fact from 1994 through the third quarter of 1997, approximately 47% of the company's reported income was fictitious because reported expenses were understated by hundreds of millions of dollars."  John Drury, CEO of the post-merger Waste Management said of the settlement, "The settlement means resolution of claims we knew existed when we acquired the former Waste Management and eliminated the need for costly and protracted litigation." ²⁸ 

• In December of 1998, United Waste Management, a WMI subsidiary was one of four companies cited in Broward Beach FL for violations at a recycling plant. The violations included improper storage of hazardous waste and failure to properly train employees. The companies agreed to combined penalties of $186,700. ²⁹ 

• In January, 1999 the Board of Supervisors in San Luis Obispo County California rejected Waste Management's attempt to take over a hauling operation. The board denied WMI based on  the company's history of violations and legal problems. Speaking in regard to WMI and it's subsidiaries, Peg Pinard, a member of the board said  "You take the whole batch together and you see it's not just one bad apple but all these companies and all these employees violating the law time after time after time." ³⁰ 

• January 1999: Waste Management agrees to pay $7.5 million to settle two lawsuits in Kane County Illinois. The suits were brought by two school districts against the county and WMI alleging that the county had illegally removed a landfill that WMI operates from property tax rolls. The settlement prevented a judge from voiding WMI's contract, (which was never put out to bid), and might have required the company to pay back as much as $100 million to the county.³¹ 

• October 1998: Waste Management Inc., three related companies and five people were indicted in California on 23 counts of criminal fraud. The charges stem from Waste Management Inc.'s Rail-Cycle project which would have shipped trash from Orange and San Diego counties to a proposed landfill in the Mojave desert.³²   The trouble began when Cadiz Land Co., an agricultural firm that grows fruits and vegetables, began opposing the proposed landfill. Cadiz feared that the landfill would contaminate ground water in an area in which it operates and began a campaign to stop the Rail-Cycle project.³³   The charges assert that WMI "tacitly approved the actions of employees who conducted corporate espionage against an opponent of that landfill."³⁴   It has also been reported that documents seized from Waste Management indicate the company was looking for ways to drive down Cadiz's stock value and make them financially unable to oppose the landfill. ³⁵  There are also charges that "Cadiz's phones were tapped, computer files were stolen and water reports were falsified." and " false information was disseminated about Cadiz including  accusations it engaged in drug trafficking and mistreated workers." ³⁶   In October, 2000 the court approved an out of court settlement for $5 million, thus sparing WMI a jury trial on the stock fraud and other charges. Excluded from the settlement decision, the special task force created to investigate Rail Cycle could merely take consolation in the fact that San Bernardino County "won't have the biggest dump in the world in our back yard." A WMI lawyer was placed on two years' probation for his role in the company's no holds barred bid to bury much of Los Angeles' trash.³⁷

1. Waste Management;  An Encyclopedia of Crimes and other Misdeeds, Greenpeace/Charlie Cray, December, 1991,      Harold Crooks Giants of Garbage, (Toronto: James Lorimer,1993).

2. Final Report: Waste Management, San Diego District Attorney, Edwin Miller, March, 1992. RE Waste Management Report, Ventura County Sheriff's Department, September 20, 1991. See Also; Waste Management; an Encyclopedia of Crimes and other Misdeeds, Greenpeace/Charlie Cray, December, 1991, Waste Management, A Corporate Profile, CCHW 1990, and Crooks, Giants of Garbage.

3. Cumberland Farms, et. al. vs Browning Ferris Industries and Subsidiaries,  Master File 87-3717  "Plantiff's Memorandum In Opposition to Defendant's Motion For Summary Judgement in the U.S. District Court for The Eastern District of Pennsylvania." 7-27-90, p. 75.

4.  Giants of Garbage, Harold Crooks, Lorimer, p. 163.

5.  "Final Report: Waste Management," San Diego District Attorney, Edwin Miller, March, 1992. RE Waste Management Report, Ventura County Sheriff's Department, September 20, 1991.

6. Gregory et. al. v. Chemical Waste Management Inc., Opinion and Order, December 11, 1996, Judge Odell Horton in the United States District Court for the Western District for Tennessee.

7. "Press Release: IDEM Uses Good Character Law to Deny Hazardous Waste Landfill Expansion," IDEM, June 13, 1997, "Company Loses Bid to Expand Landfill," Indianapolis Star, June 14, 1997

8. "SEC and WMI,” Waste News, April 6, 1998

9."SEC and WMI,” Waste News, April 6, 1998

10.“Waste’s Gold Rush,” Waste News, Aug. 21, 2000, where we learn: “Who wants to be a millionaire? Just about every high-level executive leaving the solid waste and recylcing industries in 1999, that’s who. Seven of the top 10 executives and nine of the top 21 listed in this week’s Waste News Executive Pay Rankings no longer work for the companies with which they made their millions last year.”

11.Duff,  Susanna, “Parachutes of Gold,” August 21, 2000

12.Brown, Bob, “Shakeup at Waste Management,” Waste News, August 23, 1999

13.  Gynn, Ann, “Onyx buys WMI assets,” Waste News, Sept. 4, 2000 and Brown, Bob, “WMI, French company form Venture,” March 22, 1999.

14. Barreto, Susan, “Public Pension Funds Join WMI Class Action,” Waste News, Oct. 25, 1999

15.  Gynn, Ann M., “WMI broke federal laws, SEC reports,” Waste News, June 26, 2000

16. “Parachutes of Gold,” Waste News, Aug. 21, 2000

17. “How will the high turnover rate of waste executives affect the industry,” Waste News, Sept. 18, 2000

18. Re: Waste Management, Ventura County Sheriff’s Department, September 20, 1991

19.  “Emissions Safe, Company Says; Sauget Faces 15 Count Complaint,” Robert Goodrich, St. Louis Post Dispatch September 30, 1993.

20 U.S. v. Chemical Waste Management, Oct 14, 1992, 3:CR-92-253.

21. Bukro, Casey, “A $587,900 Lesson on Whistle-Blowing; Incinerator Staffer’s Retaliatory-Firing Suit Zaps Chemical Waste,”, Chicago Tribune, October 24, 1994.

22.  Liability: $650M Suit Against Waste Management Settled, Greenwire, November 4, 1994.

23  “Two Largest Waste Disposal Companies Settle Division’s Monopolization Case,” Bureau of National Affairs,  Antitrust  and Trade Regulation Report, February 22, 1996.

24. Gregory et. al. v. Chemical Waste Management Inc., Opinion and Order, December 11, 1996, Judge Odell Horton in the United States District Court for the Western District for Tennessee.

25. Gorman, Tom,  “Spying Allegations Raised in Garbage Dump Battle,” Los Angeles Times, March 11, 1997.

26. Gonzalez, Juan,  “Some Dying to Work There,” Daily News (New York), 10/16/97.

27. Greenwire 11/3/98

28. Riccardi, Michael,  “Berger Firm Nails Down Agreement in One of the Largest-Ever Securities Settlements.”
The Legal Intelligencer 12/14/98

29.”Environmental Fines Levied,” Sun Sentinel (Ft. Lauderdale) 12/23/98.

30. Wiley, Walt. “Past Record hurts WMI effort to buy Cailf. firm,” Waste News, 1/18/98

31 Brown, Bob, “WMI Settles 2 Illinois Lawsuits.” Waste News, 1/18/99

32. Solid Waste Report. “Criminal Justice: Waste Management Inc., Individuals Face 23 Count Indictment in California,” 10/8/98

33. Nissenbaum, Dion. Rail-Cycle Plan to Hurt Dump Foe Alleged. The Press-Enterprise (Riverside, Ca.) 11/17/98

34. Gaines, Sallie. Landfill Turns Into Mountain of Trouble; Waste Management Faces 23 Counts of Corporate Espionage,”  The Chicago Tribune, 10/7/98.

35 Nissenbaum, Dion. Ex-DEA“Ex-DEA Chief Joins Rail-Cycle Team; Accused of running a dirty tricks campaign to silence an opponent, Waste Management turns to Robert Bonner.,” The Press Enterprise (Riverside California), 10/4/98.

36. Gaines, Sallie. The Chicago Tribune, 10/7/98.

37.  Page, Bob, Inland Valley Daily Bulletin,Ontario, California, 10/24/00; Wiley, Walt, “Pay Day,” Waste News, 10/30/00; Wiley, Walt, “WMI lawyer faces 2 years’ probation,” Waste News, 10/30/00

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Last modified: November 26, 2000