Environmental Background Information Center Compan: Browning FerrisIndustries

Environmental Background Information Center

Empowering the grassroots environmental movement.

CorporateProfile: Browning-Ferris Industries (BFI) by John Kenyon

BFI's Origins and Expansion
     Browning-Ferris Industries(BFI) has the distinction of being the first garbage company toexpand across North America.¹BFI was the vision of Tom Fatjo, who turned his small garbage businessin Houston into the BFI of today. It started in the 1960's when Fatjo,unhappy with his local garbage hauler, started his own company, launchingBFI into the garbage world and the New York Stock Exchange.²

     In order for BFI togrow and succeed, the plan was simple: take over the waste disposal industry.City by city, hauler by hauler, BFI acquired companies. From Louisianato Canada, BFI gave local haulers deals they could not pass up. Theyoffered larger salaries, the option of staying on with the company, andBFI stock. The common method of acquisition consisted of independenthaulers 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 soldout to BFI.³

     From 1969 to 1970, thecompany grew rapidly, and overtook twenty different markets. In theseacquisitions, there were five companies owned by Harry Phillips, a garbagehauler who had markets in Memphis, Houston, and Puerto Rico. Phillips waslater hired as the expanding company's Chief Executive Officer.⁴BFI entered markets throughout the 1970's from San Francisco to Boston. In 1971, BFI combined with the National Disposal group of companies togain access to the markets of Chicago. BFI also obtained a liquidwaste facility, chemical plants, and Consolidated Fibers, Inc.(CFI), oneof the three largest scrap paper dealers in the U.S.⁵  In 1976, Fatjo left the company to form an investment consulting firm knownas Criterion Capital Corporation. BFI's sales went from $28 millionin 1969 to $308 million in 1977. By 1980, BFI boasted operations and subsidiarycompanies in a majority of U.S. states, along with overseas operationsin Canada, Australia, the U.K., Puerto Rico, Western Europe and the MiddleEast.⁶ Foran updated list of BFI's subsidiaries click here .

     In 1983, BFI moved intothe hazardous waste disposal industry with its acquisition of CECOSand NEWCO, companies with troubled pasts.⁷This time their acquisition strategy backfired as CECOS wasplagued with numerous problems, foremost among them, their hazardouswaste 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 Phillipsoffered his job to Bill Ruckelshaus, a BFI director and two time head ofthe Environmental Protection Agency. This move was viewed by commentatorsas an attempt by BFI to boost declining stock value by currying favorwith Wall Street and to reverse the company's tarnished environmental image.⁹ At the time of Ruckelshaus' ascension, one news story asked, "Can Mr. CleanClean Up Browning Ferris?"
Problems/Violations
     BFI and its subsidiarieshave a long checkered past when it comes to both polluting the environmentand dealing fairly with competition. BFI's violations range fromillegal 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 presentedit to Pennsylvania's DER in response to questions about the company's integritywith regards to a proposed 154-acre landfill in Berks county. Theyadmitted to the following: 270 civil penalties, administrative orders,permit or license suspensions and revocations, as well as bond forfeitureactions, 10 misdemeanor or felony convictions and pleas; 24 court decreesor 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 millionin fines and settlements from 1972-1994.¹¹ This is by no means a comprehensive list. Complete data concerningfines on numerous violations are simply unavailable. This data servesto illustrate the scope BFI's violations and its history of disregard forthe law.

Anti-Trust/Miscellaneous Violations

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

1984: $3 million settlement to avoid inclusionin list of defendants being sued by NJ for price fixing and bribery ofstate officials.¹²

1984: Approximately $6 million out of court settlement with ConservationManagement concerning a lawsuit by Conservationwhich alleged that BFI had bribed a Texas state senator who was to helpdefeat Conservation's landfill application.¹³

1985: $130,000 settlement with state of Georgia,concerning charges of price fixing, bid rigging and customer allocationdesigned to undercut competitors.¹⁴

1987:Guilty plea and $1 million fine to theDept. of Justice for price fixing and customer allocation conspiracy withWMI in Ohio and Michigan.¹⁵

1988: $350,000 settlement with the state ofOhio, in Toledo to settle price fixing charges.¹⁶

1988: $6.5 million civil court judgement inBurlington Vt., for anti-trust activities including predatory pricing.¹⁷

1989:A New Jersey grand jury indicted JohnA. Pinto (BFI regional vice president,1975-1981) for customer allocationand coercion in price fixing scheme from 1970-1984. In 1989, Pinto pleadguilty and paid a $50,00 fine. Pinto continued to recieve $125,000/yearuntil 1984 when he retired. "Asset forth in testimony before the New York State Assembly Committee, Pintoclearly had ties to organized crime, and was appointed by and reporteddirectly to, John Drury, BFI's president."¹⁸

1990: $30.5 million out of court settlementresulting from a class action lawsuit brought by customers against BFIand 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 NaturalResource Conservation Commission pleads guilty to accepting a bribe fromBFI in exchange for a favorable permit ruling.²¹

1996: Settlement reached by BFI and WMI withJustice Dept. in Memphis Tenn., Georgia, Iowa and Louisiana for illegalcontracts and other anti-trust violations. BFI agreed to stop the practicesand no penalties were assessed. Concerning BFI's practices, the JusticeDept said, BFI "intentionally used restrictive contractsto inhibit competition and enhance its power over commercial customers"²²

1998: BFI reached an agreement with the USDept. of Labor. The company was cited for gender discrimination against11 women who had applied for positions as truck drivers. The agreementincluded $213,754 in back wages and guaranteed employment for the women.²³

1998: BFI reached a $682,000 settlement withthe Solid Waste Authority in Contra Costa County California, considerablyless than the fines of $1.5 million originally proposed by the Waste Authority.²⁴

1998: BFI was sued by the federal Equal OpportunityEmployment Commission in Pittsburgh Pa. The suit alleges that BFI discriminatedagainst a job applicant because of his age, and that the company hireda younger, less qualified applicant.²⁵

1998: BFI was fined $331,000 for missed pickupsin Jefferson Parish, La.²⁶

1999: BFI paid Daughtery Township Pa, $800,000to settle a lawsuit filed in federal court. The township had accused BFIof avoiding tax payments by illegally altering the manner in which it calculatedgross receipts for a landfill.²⁷

Environmental Violations

The Clarion Ledger, (Jackson Miss.) hadthis to say about BFI after concluding a ten month investigative reportinto environmental problems resulting from the company's waste disposalpractices: "BFI's purring Cadillac could be more hearse then limosine"and "BFI and its analogs offer essential services. BFI's roleis not at issue: its performance is."²⁸(italicsadded)

1976: $200,000 statutory civil penalty inTexas for selling toxic waste sludge as oil to be applied to state roads.²⁹

1985: $64,200 in fines paid to EPA for groundwatermonitoring violations at Missoula, Montana hazardous waste landfill.³⁰

1987: $23,000 in penalties for accepting inadequatelyprotected radioactive waste at Beatty, Nev.³¹

1987: $25,000 fine for an illegal landfillexpansion in Randolph, Mass.³²

1987: $200,000 for various violations at solidand bio-medical waste facility in Crescent Acres, LA.³³

1987: $104,000 in Hutchins Texas for failureto renew leachate discharge permit at solid waste landfill.³⁴

1988: $41,870 in penalties paid to State ofIllinois and EPA for contamination of groundwater.³⁵

1988: $150,000 in Randolph Mass. for landfillingmore waste than permitted.³⁶

1988: $2.5 million in penalties paid to stateand EPA for over 2,500 violations in Livingston, La., hazardous waste landfill.³⁷

1989: $280,00 for non hygienic operating conditionsat Crescent Acres, La., Solid/Medical Waste facility.³⁸

1990: $3.525 million in penalties paid ina plea bargain arrangement where BFI pleaded guilty to discharging hazardouswaste into drinking water supplies in Williamsburg Ohio.³⁹

1990: $1.55 million for over 1,400 violationsat hazardous waste landfill in Calcasieu, La.⁴⁰

1990: $659,000 in penalties to EPA for for failure to obey post closure monitoring requirements of solid wastelandfill in South Brunswick NJ.⁴¹

1993: $1.1 million settlement with state ofCalifornia for the bay area's worst sediment spill ever, which resultedfrom a BFI landfill and severely damaged two streams.⁴²

1996: Part of $11 million settlement in JohnsonCounty KS., to clean up Doepke-Holliday landfill that had been used from1950-1970 to store waste from homes, pesticides plants, oil refineriesetc.⁴³

1997: $5+million in fines and restitutionin West Chester, PA for illegal disposal of wastewater treatment sludgefrom 1989-1992. Previously, BFI had pled guilty to a 23-count indictmentcharging them with conspiracy, mail fraud, and Clean Water Act chargesinvolving the illegal disposal of the sludge at five plants in Pennsylvaniaand Delaware by BFI Services West Chester waste hauling operation. BFIwas ordered not only to pay $3 million, but restitution of $6.4 millionto four wastewater treatment plants, as well as $1.5 million to organizationsthat 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 Marylandsubsidiary. BFI admitted three criminal violations stemming fromthe release of wastewater contaminated with improperly treated medicalwaste. BFI corporate spokeswoman, Barbara Brescian said the companysettled, "in the interest of putting this two year old situation behindus. BFI vigorously maintains our subsidiary committed no wrong."⁴⁵

Organizing Tips

Determine if yourstate has a "bad boy" law which prevents companies with felony convictionsfrom opening landfills or other waste disposal operations. Share BFI'sbackground, (particularly their record of bribery), with friendly mediasources and encourage them to look into this. With regards to landfills,determine the approved capacity of the landfill and attempt to determineif BFI is exceeding landfill capacity. (This seems to be a pattern commonto the waste industry; keep dumping while waiting for a landfill expansionpermit and/or just overfill approved capacity.) For more onstrategy, see our Generic Strategy Guide.

Special Thanks to EBIC intern Hillary Hollier for her work on this project.

References

1. Crooks,Harold. Giants of Garbage. 1993. p. 37.
2.Browning-FerrisIndustries: A Corporate Profile. 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 CCompliance History: Browning Ferris Industries Inc. and Subsidiaries, filedwith Commonwealth of Pennsylvania, Dept. OF environmental Resources, Bureauof Solid Waste Management, July 1, 1992.
12..CumberlandFarms, et. al vs. Browning Ferris Industries, Plaintiff's Memorandum inOpposition to Defendant's Motion for Summary Judgement, United StatesDistrict Court for the Eastern District of Pennsylvania, No. 87-3717, p.62
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.Feb. 24, 1994. Browning Ferris Hit with Anti-trust Ruling. The HoustonChronicle, The Houston Chronicle Publishing Company.
21.The DallasMorning News, "Ex-Panel Employee Given Probation" July, 1,1995
22. Conner,Charles, Commercial Appeal, "BFI Sued Here on Monopoly Charges" February16, 1996, p.1.
23.Turner, Missy. Browning-Ferris Comes to Terms with Labor Department. TheSan Antonio Business Journal, 7/24/98.
24.Schevitz,Tanya. Free pickup for Garbage Customers Hit by Strike. The San FranciscoChronicle, 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 7centsa 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. FormC 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. .FormC 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. FormC 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. FormC 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
39. Ibid, p. 47 and 126
40. Ibid p. 127
41. Barette,Partial List of Fines and Convictions Imposed on BFI and Filials. 1995.
42. The SanFrancisco Chronicle, October 21, 1993. "1.1 Million Settlement in SedimentSpill"
43.BusinessCommunications Company Inc., Waste Treatment Technology News: "CompaniesAgree to Clean Kansas Site" No. 7, Vol. 12, April 1, 1996.
44.Enviro-Bytes,The Environmental Protection Agency. "West Chester, PA company pays finesin disposal scam." Mid-Atlantic Region July 25, 1997.
45.Miller, Bill. Firm to Pay $1.5Million for Violating Water Act: Medical Waste Flowed Into Sewers. TheWashington Post, 6/2/98.