Battle Over Trash Contract Poisons Air in Mission Viejo : Politics: Continuing squabbling over hauling franchise awarded without bid splits council, fuels battle over garbage firms.

This quiet residential community hardly seems the place to host Orange County’s great garbage war, but that’s exactly what has happened.

City politics have been poisoned for nearly two years by a garbage contract dispute unlike any other in Orange County. Already it has been a factor in tossing one councilman from office, pitting two of Southern California’s biggest haulers against each other and fueling a bitter battle among city leaders.

“I used to think that trash was boring,” Councilman Robert A. Curtis said in a recent interview. “I was wrong.”

The war began in 1990, when the City Council awarded, without soliciting bids, the exclusive residential hauling contract to Dewey’s Rubbish Service, a local hauling company owned by giant Waste Management Inc. Soon after, a political consultant hired by Western Waste Industries, a rival firm, sent a letter to thousands of residents urging them to protest the action.

Led by Councilman Curtis and egged on by the public discontent created by the mailer, the Mission Viejo council took aim at Dewey’s.

At first, Curtis and then-Mayor Christian Keena were outvoted, and the Dewey’s contract seemed safe. But a new council majority, whose members have benefited from Western Waste backing, has challenged the no-bid agreement with Dewey’s at every turn. Council members say they will not renew the contract when it is up in 1995.

Curtis has led that charge by insisting that the Dewey’s franchise--which city officials say is worth $16 million in revenue to the company over its five-year term--should have been put out for bid. And Curtis has missed few opportunities to use the garbage issue for political advantage.

At one point during 1990 council campaigns, Curtis found what he said was a phone message to a rival council member, Norman P. Murray. The message, from VerLyn (Sonny) Jensen, an attorney who represents Waste Management, read: “Check is ready.”

Curtis quickly put together a campaign mailer that included a copy of the message and called it evidence of “Norm Murray’s payoff.”

Although both Jensen and Murray denied the allegation, Murray was defeated for reelection, and his seat was filled by a Curtis ally. Combined with a second seat that went to another Curtis ally, the critics of the Dewey’s deal had a majority.

But what Curtis did not call attention to during the 1990 campaign was that he and his future council allies--Robert D. Breton and Sharon Cody--were themselves taking garbage company political contributions.

In fact, at the same time that Curtis was blasting Murray for allegedly receiving Dewey’s money--an accusation that has never been substantiated--Curtis and his allies were indirectly receiving contributions from Western Waste.

Public records indicate that Breton, Cody and a Curtis political action committee known as Mission Viejo Taxpayers for Better Government together received the benefits of $7,999 in contributions and expenditures made by the Southern California Caucus and Supervisors’ Reception, a pair of intertwined PACs that share a treasurer and address in Los Angeles.

Those PACs spent an additional $999 on behalf of Alan Gallup, a council candidate, who was defeated.

All that money was spent in the fall of 1990, just before the election in which Cody and Breton won seats on the council, joining Curtis.

And where did the money come from?

The two PACs receive backing from a variety of development and real estate groups, but they also collected contributions from Western Waste Industries in the fall of 1990 totaling $8,000, according to disclosure statements filed by the PACs and Joseph G. Hausenbauer, Western’s corporate tax manager.

Kosti Shirvanian, Western Waste’s president, did not return repeated phone calls requesting an interview. But Bernard Nash, who served as a member of the company’s board of directors for 16 years before retiring in 1991, said Western Waste made those political contributions specifically to win over Mission Viejo City Council members.

“It’s a disgrace in the industry, those contributions. Everybody’s talking about them,” Nash said. “To have an outsider come in and try to take a contract through contributions, that’s wrong.”

The transactions have other critics as well.

“Those contributions are certainly legal, but they cast a shadow of doubt when those issues come to a vote,” said Councilman William S. Craycraft, a Curtis foe. “It’s even more damaging when those contributions come through PACs.”

Once Curtis, Cody and Breton all were seated on the council, they moved aggressively to end Dewey’s exclusive residential franchise in Mission Viejo. They accused Dewey’s of fraud and of overcharging the city for its garbage hauling. They have pledged either to find a way out of the contract or to put it up for bid when it expires in 1995.

And they have sought to unilaterally roll back the hauling rate, which is $11.85 a month. At the time that rate was approved, it was the highest in Orange County, but it now is about average.

Dewey’s officials say there was never any fraud. Jensen said the accusations of overcharging grow out of a difference of opinion about how city residents would be billed. Jensen added that he expects those differences to be settled soon.

“We’re very hopeful that we can work out an amicable, peaceful solution to all of this,” he said. “We have offered to go to binding arbitration.”

For his part, Curtis denies any conflict. If the contract is eventually put up for bid, he said, he would vote for Western Waste only if its proposal is the best.

“I think a conflict emerges when a public official takes a position that is opposed to the public interest. I find it perfectly compatible with the public interest to put this contract out for bid,” Curtis said. “If you can’t accept special interest money and then vote against them, you don’t belong up here.”

In a recent interview, Breton--whose $4,000 in contributions from the two PACs amounted to nearly half of all the money he collected during the closing months of the campaign--at first vigorously defended his actions.

“I can assure you that the contributions absolutely did not play any role in my judgment or in the way I came to a decision regarding Dewey’s,” Breton said. In fact, he added, “at the time that I was interviewed by the Southern California Caucus, I did not know who their major contributors were. I still don’t know, except for what reporters have told me.”

But when pressed on the question of whether a candidate should accept contributions without knowing the source of the money, Breton appeared to have a change of heart.

“I won’t accept PAC contributions in the future,” he said. “Because the appearance is something that tends to be highlighted in newspaper articles, it’s not worth the money.”

Trash Cash

In the fall of 1990, Western Waste Industries Inc. made several contributions to a pair of intertwined political action committees known jointly as the Southern California Caucus and Supervisors’ Reception. Those PACs took that money, mingled it with other contributions and participated in political campaigns, including Mission Viejo City Council races. Among the beneficiaries of the PAC money were three Mission Viejo council candidates and a PAC chaired by Councilman Robert A. Curtis. Curtis mingled those contributions with other money and funneled donations to his favorite council candidates, who joined him as critics of Dewey’s service.

Western Waste Industries

$8,000 donated to Southern California Caucus and Supervisor’s Reception

Southern California Caucus and Supervisor’s Reception

Donations received in late 1990: $50,250

$3,000 donated to Mission Viejo Taxpayers For Better Government

$999* donated to Alan Gallup, City Council candidate

$4,000 donated to Robert D. Breton, City Council candidate

$999* donated to Sharon Cody, City Council candidate

Mission Viejo Taxpayers For Better Government

(Robert A. Curtis, Treasurer) Donations received in late 1990: $17,495

$15,000 donated to Friends of Bob Curtis

Friends of Bob Curtis

(Robert A. Curtis, Treasurer) Donations received in late 1990: $17,250

$975 donated to Robert D. Breton, City Council candidate

$975 donated to Sharon Cody, City Council candidate

Election Day

Nov. 6: Cody and Breton are elected, join Curtis to form new majority on City Council. Gallup is defeated.

Council action

Aug., 1991: Council unanimously votes to hire Los Angeles law firm to represent it in conflict with Dewey’s.

Oct., 1991: City blocks Dewey’s scheduled rate increase.

Jan., 1992: Council members say they will not approve any extension of Dewey’s five-year contract.

March, 1992: Council considers proposal to roll back Dewey’s residential collection rates.

* Independent expenditure: Money spent on behalf of a candidate without the candidates knowledge.

Source: Campaign disclosure reports, council members and other Mission Viejo city officials