Trash Hauler Keeps Wary Eye on Bribery Trial

The extortion trial of former Compton Councilwoman Patricia Moore is getting lots of scrutiny these days at the corporate law firm of Sheppard, Mullin, Richter & Hampton.

A paralegal from the firm has been assigned to monitor the proceedings for any mention of a very important client--Western Waste Industries, the largest garbage hauler in Southern California.

At stake for the company are millions of dollars in revenue, as well as its continued dominance in the region.

Although not charged in the case, Western Waste has been stung by pretrial disclosures that Moore confessed to receiving payoffs from a company vice president when she served on the Compton City Council.

Further tainting the company’s image was a guilty plea entered earlier this year by another Western Waste vice president in a Louisiana political corruption case.

And in California, the FBI has revived an earlier probe of Western Waste, it has been learned.

Agents have subpoenaed records in Riverside County, where the Board of Supervisors is considering a big Western Waste landfill project. They have also sought to interview former employees close to company founder Kosti Shirvanian.

All of this is making some elected officials nervous about their dealings with the Torrance-based company, which has thrived on lucrative long-term contracts with California municipalities.

Nowhere is Western Waste’s integrity more of an issue than in Riverside County, where the company is seeking permission to expand its El Sobrante landfill near Corona by 1,350%.

El Sobrante is the company’s crown jewel, its only landfill in Southern California, but capacity will be exhausted in two years. Expansion is considered crucial if the company expects to remain competitive and grow.

After first supporting the expansion, the Riverside County Board of Supervisors voted July 30 to delay final action for three months so it could learn more about Western Waste from testimony in the Moore trial.

“I will not vote to do business with a company involved in political corruption,” said Supervisor Tom Mullen, who led the move to delay a final vote.

‘Unfounded Innuendoes’

In an interview, Western Waste’s chief operating officer, Leslie N. Bittenson, assailed what he said were “unfounded innuendoes” about the company.

“Western is not the issue,” he said. “People are trying to make it the issue. Why does the press put all the focus on Western? The issue is Pat Moore. We are not involved in what they are looking for at the FBI.”

Bittenson said a company internal investigation has found no evidence of wrongdoing by any present or former company official in connection with the Moore case.

“I am comfortable--very comfortable--that we do not have any problem,” he said.

In the coming days, however, the issue could become more troublesome for the company when prosecutors present details of a confession Moore allegedly gave to federal agents in 1994.

According to government declarations filed with the court, Moore told of receiving $500 to $1,000 in cash on the 10th of every month from George Osepian, a Western Waste vice president, to ensure her support on the Compton City Council. Western has an exclusive contract to haul the city’s commercial waste.

Moore also claimed that former Compton Mayor Walter R. Tucker III received payoffs from Western Waste, according to court documents. Tucker, who went on to become a congressman, was convicted last year of extorting more than $30,000 from a Compton businessman and was sentenced to 27 months in Lompoc federal prison.

Moore tried to have the confession suppressed before the trial started, contending it was coerced, but trial Judge Consuelo B. Marshall rejected her claim.

Tucked away in the prosecution’s arsenal are audiotapes of conversations, surreptitiously recorded, between Moore and Western Waste chairman Shirvanian. Their contents have not been disclosed. They were made at a time when Moore, in a bid for leniency, wore a concealed body recorder while collaborating with the FBI in its investigation of political corruption in Compton.

After pulling out of the deal and withdrawing a guilty plea, Moore was charged with 25 counts of extortion and income tax fraud. Although the extortion charges do not involve Western Waste, the prosecution intends to introduce her statements about the garbage hauler to demonstrate her state of mind and to show she was predisposed to taking bribes.

Ashes to Riches

Western Waste was started by Shirvanian and his sister, Savey Tufenkian, in the mid-1950s. While his sister handled the books, Shirvanian drove an old truck up and down the streets of Inglewood to collect buckets of incinerator waste.

From those modest beginnings, the company grew into a regional giant with 1,770 employees and hundreds of distinctive orange garbage trucks. Earlier this year, Western Waste was acquired by USA Waste Services of Dallas in a $525-million stock deal.

Western Waste, which continues to operate under its own name as a wholly owned subsidiary, has contracts with about 90 municipalities in California. Those contracts, many of which are exclusive and long term, account for much of Western Waste’s revenues, which last year exceeded $270 million.

But all that garbage needs a home, and this is a region where landfills are becoming fewer. This summer, Los Angeles closed its Lopez Canyon landfill and next week the giant BKK landfill in West Covina closes for good, putting an added strain on existing landfills despite state-mandated recycling efforts.

“If I had to identify the one thing most critical to the survival of Western Waste over the long term, it would be expansion of El Sobrante,” said one industry source. “You win and lose disposal contracts, but control of landfills is very, very important, especially with landfills shutting down.”

The Moore case has been followed closely in Riverside County, along with the Louisiana corruption case that snared a former Western Waste vice president.

Vernon Hizel was accused of arranging for Western Waste to pay $150,000 for a worthless parcel of land owned by a Louisiana state representative who was helping the company obtain a landfill permit near Baton Rouge.

The money was wired from company headquarters in Torrance in two $75,000 installments. Western Waste says Hizel acted alone, taking advantage of loose accounting procedures, but company officials also confirmed that expenditures of more than $50,000 required the approval of Shirvanian or Chief Financial Officer Larry McQuaide or the board of directors.

Hizel was fined $5,000 and placed on probation in return for his cooperation. Sources in Louisiana said the case has been referred to the Los Angeles FBI office for further investigation.

Even Western Waste’s most outspoken supporter on the Riverside County Board of Supervisors has begun to express some unease about the company’s image.

Bob Buster, in whose district El Sobrante is located, said the controversy over Western Waste has “created a lot of consternation here, and it has put us in a very difficult position.”

The expansion would guarantee Riverside County 40% of the space in the expanded landfill, enough to handle local needs for 30 years. The county would share in the revenues and get a break on dumping fees.

Buster said that if Western Waste is “really muddied” by revelations from the Moore extortion trial, “then I’m of the opinion that we should not give a permit to Western Waste. We should then attempt to get their parent, USA Waste, to take over the operation.”

Shirvanian is vice chairman of the board at USA Waste and owns 6% of its shares, which are traded on the New York Stock Exchange.

“If that’s not possible,” added Buster, “then they should be in a position to sell. . . . I don’t know what we do at that point.”

Letter From Founder

Before he left for a European vacation, Shirvanian sent a letter to the county in which he warned of “adverse impacts” to Riverside County as well as to Western Waste if the board did not act promptly on the expansion permit.

If the project’s future remains clouded, he wrote, Western Waste would be frozen out of the bidding for long-term contracts with waste collectors who need a place to dump their trash.

He also noted that Western Waste has an agreement with Ontario to build a transfer station from which refuse would be trucked to El Sobrante starting in January. If the expansion permit remains uncertain, he said, Western Waste would be unable to make the long-term disposal commitment the city requires, and the disposal portion of the agreement may be terminated.

Regarding the Moore case, Shirvanian expressed “concern and dismay over innuendo in recent news articles about the supposed involvement of Western Waste.

“These articles fail to mention that Western Waste is not a party to the Moore matter and are inaccurate because no current or former Western Waste officers, directors or employees have been asked to testify at the trial.”

Shirvanian complained that in the past some solid waste haulers “have resorted to covert creation or dissemination of unflattering information to derail the projects of competitors.”

While conceding that he has no direct evidence of this in the El Sobrante controversy, he said he could not rule it out.

Western Waste’s alleged payoffs to Moore have also been an issue in Ventura County. But there, the company appears to have allayed the concerns of local officials.

Earlier this month, the city of Moorpark joined Simi Valley and the county in agreeing to allow the company to take over contract obligations of bankrupt waste hauler G.I. Industries. Final approval to transfer the franchises is in the hands of a federal bankruptcy judge.

The Moore trial could have some impact on Western Waste’s contract in Compton. The city recently filed suit to break its residential trash-hauling contract with Murcole Disposal on grounds that the company made illegal payoffs to former Mayor Tucker. Those payments figured in two criminal counts in Tucker’s trial, though the jury deadlocked on those charges.

Asked if the city might follow a similar course if there is evidence that Western made illegal payoffs, City Atty. Legrand Clegg said, “We have chosen not to speak with respect to this. Mum’s the word.”