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Corporate Profile: Waste Management Incorporated

Introduction: Waste Management's history and record

The company formerly known as WMX is the largest waste disposal firm in the world. It is also one of the largest corporations - period - in the world.1 The company was founded in 1968 with the merger of waste disposal firms operating in Florida, owned by H. Wayne Huizenga, and companies in Chicago owned by Dean Buntrock. The company began its rise to the top of the Fortune 500 as Waste Management (WMI). In 1992 the company changed it name to WMX, only to change it back again to Waste Management in 1997. From its very beginnings WMI has been involved in skirmishes with law enforcement agencies. Indeed, the company in aggressive pursuit of domination of North America's waste flows and disposal capacity has achieved an impressive record of repeated felonies.2

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."

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

The company's criminal record largely involves monopolization. According to a report by the Ventura County Sheriff's Department issued in September, 1991, the company's record goes back to its very beginnings in the 70's and includes the following:
  • Criminal violations, 10; states involved, 5; total fines and penalties, $ 5,112,950.
  • Antitrust civil cases 23; states involved, 23; penalties, $ 23,187,000.
  • Environmental civil cases, 22; states, 12; total fines and costs, $ 5,424,885.
  • Administrative cases, 87; states involved, 13; fines and penalties, $ 3,345,408.
  • Chemical Waste Management, a subsidiary of Waste Management, had the following judicial and administrative environmental actions:
  • Total actions, 81; states involved, 12; fines and penalties, $ 15,251,690.
  • The total fines and penalties for this period (1970-1991) of the company is at least $52.3 million. 18
  • Since then, the company has continued to run afoul of the law but it is more difficult to track their record for this period because law enforcement sources have not published any further compilations of the company's criminal and civil violations. What follows is a compilation of the company's ongoing problems from government documents and news media accounts.

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

    These are some of the more recent sanctions against WMI and its affiliates:
    Rail Cycle:
    Has the company reformed itself? You be the judge.


    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

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

    34Gaines, 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