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#40 - Solid Waste Industry Is Immersed In The Tactics Of Organized Crime, 30-Aug-1987

"There is a substantial body of evidence that organized crime controls
much of the solid waste disposal industry in New York State and
elsewhere. There is also evidence that the criminal activity is not
confined entirely to organized crime, but is also engaged in by other
unscrupulous entrepreneurs; and that there have been instances of
multinational corporations not hesitating to jeopardize public health
and safety."

This quotation is taken from the opening paragraph of a report titled,
released in June, 1986, and re-released in July, 1987. The report pulls
together information from Congressional and state investigations over
the past 20 years but stresses information gained during hearings held
by New York State Assemblyman Maurice Hinchey in 1984.

"The objective has been to produce an accurate assessment of the waste
disposal industry and the extent of criminal activity within it, as
well as to discuss policy alternatives needed to correct the problems."
The bulk of the report focuses on New York. Nevertheless, the report
gives a good picture of how the solid waste hauling industry works. It
is not a pretty picture.

Organized crime--in a narrow sense the Mafia, and in a broader sense
any large gang of ruthless thugs who set out to profit at the expense
of the public and who succeed to such an extent that they can operate
with impunity--has gained influence from time to time in many American
industries. But the solid waste industry has been particularly prone to
takeover by organized crime.

The basic feature of organized criminal involvement is the "property
rights" system by which one hauler maintains his right to pick up
garbage from a particular customer. (We use "his" and "he" throughout
this discussion because we don't know of any women running waste
hauling operations.)

Garbage is a low-tech business. You need a strong back and a truck and
a place to dump the stuff, and not much else. Under these
circumstances, you would expect a lot of competition between haulers.
The "property rights system" minimizes competition. Under this system,
a hauler buys the right to pick up waste from a "stop" (the Mafia's
name for a customer). The price of a stop is 30 to 50 month's income
from that stop. So you buy a stop and then for 30 to 50 months you make
not a penny picking up the garbage there. Naturally, during that period
(and beyond), you need to be guaranteed that no one else will come
along and offer to haul garbage from that stop for a lower price. The
Mafia (or other unit of organized crime, such as a large waste hauling
company) guarantees that no one will bid against you for the right to
service that stop. If anyone DOES bid against you, the Mafia (or
someone else) intimidates the newcomer, threatens him, breaks his legs
or even murders him. Murder is not necessary very often. Newspaper
stories about a little violence go a long way toward getting the
message out: don't compete against the people who now haul the garbage
in this town or that town. Often just a brick through a truck
windshield is sufficient to get the message across.

The vehicle for establishing and enforcing the property rights system
is the "trade waste association," the membership of which is made up of
the waste haulers working in an area. The associations are syndicates
typically controlled by organized crime through the usual tactics of
economic reprisal, intimidation, violence and, when necessary, murder.
The trade waste association can dictate the price that waste haulers
will receive for their services and it can prevent customers from
switching to another hauler to get better terms. Sometimes the labor
union representing the waste haulers will also be controlled. The
garbage strike becomes another weapon for enforcing the property rights
system (in addition to serving the legitimate function of gaining a
fair wage and better working conditions for workers).

Organized crime seeks to corrupt law enforcement officers and public
officials through bribes, payoffs and even intimidation. And tactics
developed by the mob are now used successfully by "legitimate"
businessmen in the waste hauling industry.

Large waste haulers come in for special notice in the Hinchey Report.
The sordid history of SCA Services is outlined briefly-they were up to
their ears in organized crime and illegal waste disposal in New Jersey
and New York, including allegations by witnesses under oath that SCA
had murdered two competitors. SCA was run by such successful
businessmen that Waste Management, Inc.--the nation's largest waste
hauler--bought them out for $423 million in late 1984. SCA was at that
time the nation's second largest waste hauler.

When Waste Management absorbed SCA, BFI of Houston, TX, became the No.
2 hauler in America. The Hinchey Report devotes a short but revealing
chapter to BFI's organized crime connections and tactics. Hinchey cites
instances in which BFI has been accused by officials of price fixing
(with SCA) in Georgia, of bribing a state senator in Texas, of fixing
prices in six counties in New Jersey, of paying off health officials in
Pennsylvania, and of charging competitors exorbitant prices for
allowing them to dump in a BFI landfill in Colorado. These are the
tactics of organized crime, as the Hinchey Report makes clear.

The Hinchey Report makes good reading because all our friends in the
waste hauling industry appear, and because their ways of doing business
are spelled out so clearly. The quotations are vivid, so the
individuals come alive. For example, Anthony Corallo, boss of the
Luchese crime family is riding in a chauffeur-driven Jaguar that he
does not know is bugged. The chauffeur looks in the rear-view mirror
and sees they're being tailed by law enforcement officials. He says,
"They're behind us now, they figure you running some big, big
enterprises right now. That's what it is. You know, with the garbage,
and with an... and with incinerators now, and ah... with all that shit.
Incineration is a big thing with us, the thing of the future. They
figure that you got it, that you control it." Mr. Corallo replies:
"They're right, you know."

Get your free copy of the 187-page ORGANIZED CRIME IN THE WASTE HAULING
INDUSTRY from Assemblyman Maurice Hinchey, Room 625, Legislative Office
Building, Albany, NY 12248; phone (518) 455-4436.

--Peter Montague


Descriptor terms: organized crime; landfilling; bfi; wmi; ny; maurice
hinchey; hinchey report; waste hauling industry; solid waste industry;
sca services; tx; il; ga; co; luchese family;