Phat Dogz

GOOD NEWS: Some people just don’t know how to throw a party. With the umpteenth annual Earth Day right around the corner, I am bracing for the inevitable tsunami of doom ’n’ gloom factoids proving, yet again, how we’ve screwed up the planet beyond redemption. Okay, maybe we have, but is this really a reason to be so negative? I’d rather observe Earth Day by celebrating the rash of recycling fraud now taking place. Two months ago, the operators of one L.A. recycling and sorting facility were charged with perpetrating a $6 million recycling scam. Last month, the operators of another pled guilty to ripping off $2.5 million. And apparently, it might be happening right here in Santa Barbara, too. We should be very proud. The fact that recycling has become a fertile field for thieves and scam artists demonstrates the extent to which the environmental movement has arrived. Investigators with the Santa Barbara Sheriffs Department have launched a criminal investigation of Waste Management — a company that runs a Materials Recovery Facility (MRF) up in Santa Maria at which bottles, cans, plastics, paper, and cardboard are sorted and sold. The suspicion is that Waste Management has misappropriated $1 million that otherwise should have gone to the County of Santa Barbara. Waste Management is one of the trash industry’s big three, and according to some industry watchers, can be found in the encyclopedia in the “anti-Christ” section. The Waste Management MRF processes the commingled residential recyclables of North County and some from South County, too. There, they are unmingled, bundled, and trucked to places like Long Beach where they are then shipped via tankers to faraway lands like China where they are turned into new toys and packing boxes for electronic equipment. The point is this stuff has value, which fluctuates day to day much like the price of hog bellies. Under its franchise agreement, Waste Management must split the proceeds of any recyclable sales with the county. Everybody gets a cut.

According to people in the trash business, there’s about a million ways for operators to cheat, and according to one very disgruntled former Waste Management employee named Mark Wall, the company’s managers were exploiting every single one of them at the county’s expense. Wall worked for Waste Management as a bookkeeper data-entry dude from 2001 to 2004. During that time, he claims, he was instructed by his bosses to lie, cheat, and steal. If recyclables were selling for $120, he claims he was told to report Waste Management got only $115. The company would then pocket the $5 difference. Wall claims he crafted a program on his company laptop to keep the true sale price off the official books and hide this information from the county. The more money he kept from the county, Wall said, the bigger the bonus his bosses got. Initially, Wall claimed he was not allowed to see the actual contract so he didn’t know for a fact he was breaking the law. But he had his suspicions. He said he confronted one boss, asking how he could go to church on Sunday and steal Monday through Friday. Wall claimed his boss replied, “What does God have to do with business?” When new management came in, Wall said he finally could read Waste Management’s contract with the county. That’s when he knew for certain he’d been complicit in criminal acts. Wall claims he blew the whistle then, and that for a while the practices stopped. But then the old managers returned, and it all started up again.

With Wall’s allegations of a smoking laptop, the county Sheriffs Department initiated a criminal investigation. But when one investigator called Wall at work, he said he got cold feet. “I have a wife and two children,” he explained. When he declined to stand by his initial story, the investigator asked if he’d been lying. Wall said he answered, “I made everything up.” But even after he quit in 2004, Wall said he couldn’t let go. By then he said he’d been threatened and intimidated. Last month, after waking up one night in a cold sweat — he’d been dreaming his former boss was hunting him in the woods and shot him — he blew the whistle a second time. On March 31, he mailed a three-page, single-spaced typewritten letter detailing many of the same allegations and mailed them out to about 25 people in law enforcement and county government. Because of Wall’s on-again, off-again statements, investigators find him a less-than-reliable witness. But he claims he tape-recorded all his incriminating conversations with his bosses. When they’d tell him to do something questionable, Wall said he’d turn on his tape recorder, repeat what they just told him, and ask them if that’s what they wanted him to do. I haven’t seen or heard these tapes, but if they exist as described, I’m sure they’re damning.

County solid waste officials called Waste Management in for a chat shortly after Wall first leveled his accusations. Lo and behold, Waste Management discovered upon a closer examination of their records that they’d short-changed the county to the tune of nearly a half-million bucks in recycling revenues between 2001 and 2004. Oops. The county then hired a snooty Newport Beach firm — Hilton Farnkopf & Hobson, which specializes in recycling fraud — to audit Waste Management’s books. Last October, the auditors concluded the company may have short-changed the county $1 million between 1998 and 2004, but made no finding of criminal intent. Only Wall has made that charge, but Sheriff’s investigators are looking at it anew. Admittedly $1 million isn’t what it used to be, but a whole lot of people are chillin’ in state prison for stealing a lot less.

In the meantime, Wall’s smoking laptop, which he left when he quit in 2004, has yet to be found. Maybe the disputed million dollars is just a big misunderstanding over contract language. It happens. But I’m kind of hoping the Wall scenario proves correct. It makes for a better story, but it also proves, however underhandedly, the value of recycling. If something’s worth ripping off, it must be worth something. I know that may not sound like much, for me it calls for a celebration.

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