Grand Juries in 8 States Probe Waste Industry Pricing

Eleven federal grand juries in at least eight states are looking into allegations that waste disposal companies fixed prices and rigged bids, the Justice Department said Thursday.

The allegations of criminal antitrust activity also include a conspiracy to allocate customers and territories, said Mark T. Sheehan, a department spokesman.

Sheehan said grand juries were operating in Birmingham, Ala.; Orlando and Fort Lauderdale, Fla.; Memphis, Tenn.; Harrisburg and Pittsburgh, Pa.; Trenton, N.J.; Phoenix, Ariz.; Cleveland, and Los Angeles. He declined to name the 11th location or the firms targeted by investigators.

However, The Wall Street Journal, quoting unnamed sources close to the investigation, reported Thursday that grand juries in six states--Alabama, Tennessee, Ohio, Arizona, California and Florida--are looking into allegations against the industry leader, Waste Management Inc. of Oak Brook, Ill.

Active on Stock Market

The No. 2 company in the industry, the Houston-based Browning-Ferris Industries, is a target in those states, except Florida, the newspaper said.

Waste Management was the most actively traded New York Stock Exchange issue, down 2 to 40 1/8. Browning-Ferris slid 5/8 to 27.

Asked to characterize the size of the investigation, Sheehan said: “Anytime you have 11 grand juries operating in a single industry it’s fair to call it a large investigation.”

J. Steven Bergerson, vice president and general counsel of Waste Management, said the firm has been asked to supply documents to the Orlando, Phoenix and Memphis grand juries. He said the Los Angeles grand jury also probably was looking at Waste Management.

However, Bergerson said the grand juries are looking at the industry in general and added, “We’ve been told we’re not the prime focus.”

Browning-Ferris spokesman Peter Block, citing the secrecy of the grand jury process, declined to say if his firm was being investigated.

“We fully believe we have complied with the antitrust laws and we’ll fight any allegations that we have not,” he said.

According to a Justice Department source, who spoke on condition of anonymity, the grand juries in Trenton and Fort Lauderdale have returned indictments.

In Trenton, a criminal information alleging bid rigging by Nuway Trash Removal of Primos, Pa., was filed May 6, the source said. Multi-count indictments were brought March 3 against Atlantic Disposal Service of Mount Laurel, N.J., and DeLorenzo Twin Counties Disposal of Trenton.

In Fort Lauderdale, officials of Waste Management’s south Florida subsidiary, United Sanitation Services, were indicted on antitrust charges in November, 1985, and convicted late last year. They have appealed.

Criminal violation of the antitrust laws by individuals is punishable by up to three years in prison and a $100,000 fine. Companies can be fined up to $1 million per violation.