Waste Management Charged With Theft : Landfills: The firm is accused of cheating a rival and the city of San Jose out of $850,000. It is planning a dump in Weldon Canyon.

In another blow to developers of the Weldon Canyon Landfill, a Santa Clara County grand jury has charged Waste Management of California with grand theft for allegedly cheating a rival landfill operator and the city of San Jose out of at least $850,000 over six years.

Ventura County supervisors, who in April postponed a decision on Waste Management’s plan to open a dump in the rugged hills between Ventura and Ojai, said the indictments make them more wary of the firm.

“I think this puts Waste Management in a pretty precarious position in Ventura County,” said Supervisor John K. Flynn, who has supported the Weldon Canyon project. “They were in that position anyway, but this certainly makes it more serious.”

The Santa Clara County grand jury charged Waste Management and eight employees--including an executive now working for the firm’s Illinois-based parent corporation--with dumping refuse collected from other cities in landfill space allocated to San Jose.

The eight-count indictment, handed down June 30 but released Wednesday, also charges that Waste Management cheated landfill operator Browning-Ferris Industries by mixing trash from several jurisdictions then dumping it all under San Jose’s name to get the city’s discounted rate.

The result was that, by September, 1991, when police raided Waste Management’s Santa Clara County offices, the company was paying $15 a ton to dump rubbish at the Newby Island Landfill in San Jose, instead of the usual rate of $28 a ton, city officials have said.

A Waste Management spokeswoman in Santa Clara said the company and its employees are innocent.

“This is basically a dispute over the terms of a contract,” spokeswoman Barbara Zeitman Olsen said. “It’s a local dispute, and it’s unwarranted to treat this as a criminal matter. It’s not.

“No one has been disadvantaged, and no one sought personal gain. Each of the parties involved--the city, our competitor and our company--received exactly what was contracted for.”

Waste Management and Browning-Ferris, the nation’s two largest trash companies, are fierce competitors for San Jose’s rubbish-hauling and disposal business. Waste Management won the city’s rubbish-hauling contract away from Browning-Ferris in 1985.

Waste Management of California and its Santa Clara County division both pleaded not guilty in Superior Court on Wednesday, as did three employees: John Slocum, 39, a finance executive with Waste Management of North America in Oakbrook, Ill.; Herbert James Reid, 61, of Scotts Valley, general manager of Waste Management Santa Cruz; and William Harbert, 39, general manager of a Waste Management subsidiary in Seattle.

Also arraigned Wednesday were three managers of Waste Management’s Santa Clara County division: Gino Scopesi, 55; William Burrows, 41; and William Rose, 39. Pleas are expected next week.

Company executives Marshall Moran, now working for the corporate parent Waste Management Inc. in Italy, and Lawrence Galek, a regional controller, have also arranged to enter pleas at future dates, prosecutors said.

The indictments follow a series of recent controversies in Southern California surrounding Waste Management.

Last month, a Waste Management subsidiary settled a dispute with the city of Mission Viejo by agreeing to forgo two guaranteed rate increases to offset what the city said was a 30% overestimation of city garbage the firm collected. City officials said the settlement will save residents $1.2 million over five years.

In a March report, San Diego Dist. Atty. Edwin Miller warned that public agencies should use “extreme caution” before dealing with Waste Management Inc., parent company of Waste Management of California.

Miller scolded the company for its history of environmental sins, public corruption and attempts to “gain undue influence over government officials.”

A 1991 Ventura County Sheriff’s Department survey found that the fast-growing company had paid $52.3 million in fines nationwide during the 1980s. It listed 10 criminal, 22 environmental and 23 civil antitrust cases against the company--including several for price fixing.

Waste Management officials have repeatedly said that nearly all of their legal problems have resulted from the activities of former owners of recently acquired subsidiaries.

A company official said the San Diego report was “replete with inaccurate statements and half-truths taken out of context.”

And in Ventura County, company project manager James M. Jevens said he sees the San Jose indictments as purely “a local issue for the Santa Clara company” that should not hurt his efforts to sell the Weldon Canyon project.

“Personally, it hurts those of us in the field when one of us drops the ball,” Jevens said. “But I could not evaluate the effect of that on our efforts in Ventura County.”

However, county officials said Wednesday that the company’s history of legal problems is troubling, especially since Waste Management hopes to own and operate the west county’s principal landfill for at least the next 30 years.

The company already operates the Simi Valley Landfill, the only dump in the east county.

“I’ve never felt comfortable with the prospect of that privatized monopoly in Ventura County,” Supervisor Maria VanderKolk said. “And there’s just a long history of these types of problems.

“Everybody says that doesn’t reflect on Waste Management here. Well, I think it does. And we’re just going to have to be very, very careful.”

Supervisor Vicky Howard, who previously has praised Waste Management’s Simi Valley operation, said she too is very concerned about the indictments and about the San Diego district attorney’s report.

“It’s really disturbing,” she said. “It doesn’t look good.”

Susan K. Lacey, in whose supervisorial district Weldon Canyon is located, said the indictments don’t help Waste Management’s faltering effort to gain approval for Weldon Canyon.

“Even before this, there were some very serious questions by a lot of folks about the company, and this is not going to be a positive,” Lacey said.

Supervisor Maggie Kildee said, “I would be very wary of doing business with someone who behaves in the manner described by the grand jury.”

Waste Management’s plans to build a $30-million dump on 110 acres of Weldon Canyon suffered an unexpected setback in late April, when the Board of Supervisors stalled the project.

Supervisors said they wanted county planners to consider four alternate dump sites--all near Weldon--and to study a proposal to ship the county’s trash out of state.

The board voted 4 to 1, with Flynn dissenting, to reject the environmental report on Weldon Canyon until the alternatives had been more carefully studied.

Just last week, Waste Management withdrew its landfill proposal from board consideration to try to trim the $300,000 price tag on the expanded study of different sites.

Jevens said the move was not timed to occur before announcement of the San Jose indictments or to delay a board vote. But he said county planners now estimate that a final environmental study will not get to the board until early 1993.

MIRED IN CONTROVERSY: Indictment is just latest of firm’s legal woes. B4