Waste Haulers Are Charged With Plotting to Fix Prices
Three trash hauling firms--including the California affiliate of the nation’s largest waste disposal company--and five individuals were charged Monday by the district attorney’s office with conspiring to fix solid waste disposal prices in Los Angeles County since 1982.
The firms charged with conspiracy against trade were Waste Management of California Inc., Western Waste Industries and Angelus Hudson Inc.
Also charged were Wiley A. Scott, 32, of Pasadena, an official of Waste Management; Clifford R. Chamblee, 63, of Lakewood, an official of Waste Management at the time of the alleged conspiracy; Ishkan Gordian, 43, of Glendale and George Osepian, 68, of Torrance, both officials of Western Waste; and John Marderosian, 54, of Reseda, an official of System Disposal Service Inc. at the time of the alleged conspiracy.
The defendants unlawfully conspired “for the purpose of and with the effect of dividing the market for commercial solid waste disposal services among competitors and fixing prices for those services among competitors,” according to the felony complaint.
In the complaint, 23 overt acts are listed in which the various defendants are accused of furthering the conspiracy.
Arrest Warrants Issued
The district attorney’s office Monday declined to comment on the complaint and on the issuance of arrest warrants for the five individuals, filed with court officials Monday afternoon after being signed by Los Angeles Municipal Judge Larry P. Fidler.
A spokesman for Dist. Atty. Ira Reiner said that Reiner will officially announce the filing of the case at a press conference this morning.
In a media advisory released late Monday by Reiner’s office, the purpose of the news conference was described as “to announce the filing of a felony antitrust case alleging a major conspiracy to fix prices and reduce competition in the trash hauling industry in Los Angeles County.”
The overt acts listed in the complaint included alleged actions in 1985 and 1986 by Chamblee directing Waste Management sales personnel not to solicit commercial accounts held by other disposal companies, including Western Waste, in order “to implement a horizontal market division scheme.” Osepian and Gordian also allegedly directed Western Waste sales personnel not to solicit customer accounts belonging to Waste Management and other firms in 1985 and 1986.
As well, the complaint alleges, Waste Management conducted “a concerted sales effort or ‘blitz’ ” in early 1985 to take commercial customer accounts from two other firms. In one case, the complaint states, a blitz was directed at Haig Disposal to discourage competition from the smaller firm. In the other case, Waste Management allegedly conducted its blitz against GSX-System Disposal Service in Beverly Hills, Long Beach and other locations “in order to retaliate for the taking of a commercial customer account or accounts.”
Chamblee is also accused of directing Waste Management personnel in 1986 “to avoid competition with other disposal companies.”
Gordian and Western Waste, meanwhile, are accused of engaging “in price communication with competitors in order to fix and stabilize prices” between December, 1985, and May, 1986.
Waste Management Inc., a 15-year-old Illinois-based firm, reported solid waste services revenues of approximately $1.57 billion in 1986.
Faced Earlier Charge
Western Waste, based in Gardena, reported record revenues of $47.4 million for the first half of fiscal 1987. The firm was charged in March by Reiner’s office of hiding hazardous waste in household trash and dumping it illegally in three Los Angeles County landfills.
Last week, the U.S. Justice Department announced that 11 federal grand juries in at least eight states are looking into allegations that waste disposal firms fixed prices and rigged bids. The Wall Street Journal, quoting unamed sources, identified Waste Management Inc.--which is listed on the New York Stock Exchange--as the subject of probes in six states, including California.
Osepian and Marderosian, both reached by telephone late Monday, said they were unaware of the felony complaint and therefore could not comment on the allegations.
“I’ll be damned,” said Osepian, who said he serves as a vice president of Western Waste. “It’s a shock.”
The other defendants could not be reached.
