Grifter’s Tale Scrapped a Giant Dump

A canny drifter who called himself Tony Bergschneider arrived in the tiny Mojave Desert town of Amboy four years ago and hired on as a short-order cook--an unlikely beginning to what would be an explosive business corruption case.

A career con man whose real name was Joseph E. Lauricella, he had served three prison terms. And with charges of drug trafficking and grand theft hanging over his head, he had picked the desert as a good place to hide out.

But in time Lauricella’s cover was blown, and he became the central figure in a criminal case involving a plan by Waste Management Inc. to turn a barren stretch of creosote flats into the world’s biggest garbage dump.

Due largely to the grifter’s testimony, Waste Management and four of its executives have been charged by a San Bernardino County grand jury with plotting to destroy the project’s main adversary through a clandestine campaign of corporate espionage, disinformation and dirty tricks. Four San Bernardino County officials have been indicted on corruption charges as well.

Waste Management has pleaded not guilty and is seeking to have the case thrown out, accusing prosecutors of relying on the word of a notorious liar with a history of making phony accusations to save his own skin. Even if Waste Management is exonerated, however, thanks to Lauricella the dump is dead. The company walked away from its nearly $50-million investment after the controversy broke.

Waste Management was certainly no stranger to legal scandal or the bare-knuckles political gamesmanship required to build dumps. In its 30-year rise from pipsqueak garbage hauler to global trash king, the company had faced a plethora of charges involving its environmental and business practices.

But none of the armies of regulators or litigators Waste Management had faced in the past would do it more damage than Lauricella. Whether or not Waste Management is criminally culpable, by hiring Lauricella it certainly was guilty of a bizarre personnel decision.

Within days of his arrival in May 1995, everyone agrees, the glib Lauricella traded up from flipping burgers to working as a contract consultant for the world’s biggest waste disposal firm.

To build its big desert dump, Waste Management had to overcome only one serious opponent: Cadiz Inc., a Santa Monica-based fruit grower that owned 43 square miles of adjacent land along with an invaluable subterranean reservoir of water it considered at risk from the dump.

Authorities say that when Cadiz would not drop its resistance, Waste Management mounted a secret campaign to sink its stock price by stealing trade secrets, filing bogus complaints with regulators and smearing Cadiz and its management on the Internet. Lauricella, 48, allegedly became Waste’s unlikely foot soldier in the campaign against Cadiz.

Looming over the dump battle were the classic issues in California development: water, real estate, local politics and allegations of fraud. The backdrop was the trash wars of the 1980s, when neighborhood activists fiercely resisted expansion of urban landfills and sanitation officials warned of an impending disposal crisis.

Waste Management’s plan was to haul Los Angeles and Orange County trash by rail to a state-of-the-art landfill, built huge for economies of scale. The project, dubbed Rail Cycle, partnered the firm with Burlington Northern & Santa Fe Railway Co. The site was Bolo Station, a stark, uninhabited rail stop about 90 miles east of Barstow where Waste Management would build an Everest of trash rising 40 stories and covering three square miles.

Stranger in Town Seeking Work

Amboy is a forlorn speck on former U.S. Route 66 a few miles from Bolo Station. It has a tiny post office, a school with five pupils, and a weathered eatery, Roy’s Cafe, to go with a population of fewer than a dozen. So the stranger parked in front of Roy’s early one Sunday in the spring of 1995 could hardly go unnoticed.

Town resident Don Riddle wandered over, and the stranger introduced himself as Tony Bergschneider. Low on cash and carrying a tent, Bergschneider had camped out the night before. He had seen a “cook wanted” sign at Roy’s and was waiting for it to open. His presence in the area seemed plausible enough. “He had been under a lot of stress, and he wanted to get out of the rat race,” Riddle recalled.

Bergschneider lasted no more than a couple of weeks at Roy’s. But in that time he waited on three men from Waste Management. Their lives, and his, would never be the same.

The three executives--regional Vice President Stu Clark, Rail Cycle project manager Glen Odell and project consultant Harold Cahill--were out drumming up local support for the desert dump several days before a key hearing before county supervisors.

There were, in fact, few supporters to enlist. The tiny desert hamlets--Amboy, Cadiz, Essex and Fenner--had been water stops in the age of steam locomotives. Later, fabled Route 66 kept them alive. But they were marooned in the 1970s when Interstate 40 stole away the traffic. Virtual ghost towns now, they had no more than 50 inhabitants combined.

Within days of arriving, Lauricella attended an organizational meeting at Amboy School and put in his two cents. He was chatty, likable and seemed to know a lot about computers.

He was “a very charismatic person,” recalled Jake Marti, a local man Lauricella befriended. “He could talk a bird out of a bush.”

Waste Management executives were impressed too. A few days later, when they bused in supporters to testify before the supervisors, Lauricella was anointed main speaker and given a script to rehearse.

He brought down the house. Transformed from rootless drifter to long-suffering witness to the area’s dusty decline, he lamented the flight of sons and daughters to jobs in the city.

“I live six miles from the Bolo Station site,” he said. “I speak for the people who have the most at stake with Rail Cycle. . . . Give us and our children a chance for a better future.” A videotape of the hearing shows a man of middle age in a sweater and glasses with a neat mustache--earnest, articulate, a model citizen.

Two days later, on May 18, Waste Management made Lauricella a consultant. For $1,500 a month plus expenses, he would coordinate pro-dump activities and report to Odell in Irvine. Eventually, his pay would go up to $2,000 per month.

Amboy was not a place to hold a job fair, and Waste Management says it did not examine Lauricella’s background or the phony Social Security number he gave the firm.

Although later charged as felonies, certain of Lauricella’s activities involved the common deceptions of “Astro Turf” campaigns--in which business groups seek to create an illusion of vigorous grass-roots support.

To lend the effort an official veneer, Waste Management had organized the locals into the FACE (Fenner, Amboy, Cadiz and Essex) Environmental Coalition. Lauricella distributed letters, resolutions and news releases scripted by Waste Management but invariably quoting locals he had chosen as mouthpieces.

All of the statements were “prepared for us ahead of time,” said Marti, who was often presented as a spokesman. So documents could not be traced to Waste Management’s fax machines, Marti said, he was sometimes told to snip off the tops.

Soon Lauricella was spending less time promoting the dump and more time attacking pesky Cadiz Inc., which was preparing for a corporate acquisition that would boost the financial and political clout it could wield against the dump. The takeover target, Sun World International, was a much larger produce grower that had gone into Chapter 11 to reorganize its debts. Cadiz planned to buy the firm and take it out of bankruptcy, but had to sell securities to raise cash.

Internal documents show that Waste Management sought to cast Cadiz as inept and dishonest--hoping to disrupt the firm’s anti-dump efforts and undermine the Sun World deal. But an internal memo, titled “Cadiz Preemptive Strategy,” stressed the need for a stealth approach. It said: “The actions . . . to be effective, specifically require that others . . . deliver the messages,” which is where Lauricella and his locals came in.

A key point of attack involved Cadiz’s hope to export water from its desert aquifer to thirsty Southland cities. The Waste Management plan was to convince investors that Cadiz had inflated its estimate of the amount of surplus water, which could depress the company’s stock.

With data supplied by Waste, Lauricella and his group peppered a potential water customer--the Mojave Water Agency--with faxes, letters and reports claiming the water deal was a pipe dream.

“Surely, you have something more important to do with your time . . . than to let this company use you to hype its stock with this phony water deal,” one letter said.

In the quest for dirt on Cadiz, Lauricella was dispatched to Hyder, Ariz., where a desert farm run by Cadiz had flopped and crops were left to wither. With a video camera, Lauricella made a propaganda film that would be slipped to various government agencies, complete with melodramatic narration.

“As far as you can see in any direction, nothing but death and desolation,” the film intoned.

But in Hyder, Lauricella came up with something even better. According to internal memos, Waste Management had been seeking a list of Cadiz’s investors to plant negative information. And in Hyder, he tracked down a former Cadiz employee who gave him a stack of old computer disks that contained lists of shareholders.

In February 1996, Lauricella and two locals, hoping to trigger an investigation, dropped off packets of anti-Cadiz material at the U.S. Securities and Exchange Commission in Los Angeles and at the law firm for Sun World’s biggest creditor, John Hancock.

Included were the Hyder film, documents accusing Cadiz of trying to dupe investors with inflated water claims, and press clippings showing that Cadiz’s British-born CEO, Keith Brackpool, had once been fined $3,000 for violating British securities laws.

Lauricella said that on Rail Cycle manager Odell’s instructions, he went to the Internet “hundreds of times” to besmirch Cadiz on topics ranging from the water deal to alleged mistreatment of farm workers.

Lauricella would later testify that he tampered with test wells to create inaccurately low estimates of ground water recharge. And he said that to further distract and disgrace Cadiz, he arranged the filing of dozens of bogus complaints with government agencies about everything from drug trafficking to illegal hazardous waste disposal. On this and other topics, Lauricella’s grand jury testimony was breezy and vaporous, offering little in the way of who, what, where and when.

Unpaid $20,000 Bill Leads to Arrest

Lauricella had become a key Waste Management operative, but blew his cover by returning to his old tricks. In September 1996, he placed orders with a Tempe, Ariz., computer supplier, which began shipping equipment with no money down. When the bill hit $20,000, the firm decided it had been had.

Were this Los Angeles, where $20,000 scams are ubiquitous, Lauricella might be a free man yet. But the computer firm’s complaint went to the sheriff’s station near Twentynine Palms, where Lauricella then was living. Sheriff’s deputies quickly obtained a search warrant and showed up the next day, Oct. 15, at Lauricella’s house.

Some of the computer equipment was at his home but, suspiciously, some was on consignment at a local thrift store. When Lauricella refused to go to the station for questioning, he was arrested on suspicion of grand theft. A fingerprint check soon revealed his identity and the outstanding warrants.

Lauricella immediately dangled the bait, announcing that he was a bagman for Waste Management and saying he was able to blow the lid on a vast corruption scheme. “Get the feds in here . . . This is way over your heads,” a police report quoted him as saying.

He said: “I was hired to make sure that Cadiz was crushed.” He claimed to have paid bribes to county officials, specifically naming a county supervisor. When he failed a polygraph test, Lauricella said he suspected a payoff but did not see one and admitted that “he embellished the incident in an effort to help himself out of the current matter he had been arrested for,” the polygraph examiner wrote.

The matter might have ended there. But this was Waste Management, whose reputation preceded it.

On the many occasions it has faced criminal or civil charges, the firm typically has invoked a double-barreled defense: denying wrongdoing and blaming any problems on rogue employees or new subsidiaries.

Indeed, since its founding in 1968 by Wayne Huizenga (who later founded Blockbuster Video) and Dean Buntrock, Waste Management has experienced explosive growth, gobbling up hundreds of local hauling and disposal firms. Often, legal problems were incubating when Waste Management took over. Even so, the frequency of million-dollar settlements and judgments seems striking.

A federal judge, issuing a 1996 ruling against Waste Management for $91.5 million, remarked: “What is troubling about this case is that fraud, misrepresentation and dishonesty apparently became part of [Waste’s] operating culture.”

So despite Lauricella’s failed polygraph test, authorities were sufficiently intrigued to go forward, and they confirmed some of his statements. Then, on March 6, 1997, investigators armed with search warrants swooped down on Waste Management’s offices and the homes of Odell and Clark.

The searches netted a trove of potentially incriminating documents. Among them were handwritten notes of a Waste Management lawyer that state such goals as “Cadiz Kill” and “stock price drop is what we’re after.” Equally provocative is an elaborate script from Waste Management in which phony investors trash Cadiz stock on the Internet as a lousy buy.

However, authorities still needed Lauricella to connect the dots. And by then, disturbing reports had begun filtering in about his sinister habit of fabricating charges to win his captors’ favor.

A prosecutor in Santa Clara County told The Times he warned San Bernardino authorities that Lauricella was utterly unreliable. This past December, Lauricella’s credibility eroded further when a federal judge in San Jose threw out a double murder conviction in which Lauricella served as key prosecution witness. The reason: Authorities had not given the defense a letter from a federal prosecutor accusing Lauricella of providing phony leads in another case.

Authorities concede that Lauricella, now serving his fourth prison term, has an unsavory past. But they say they will be able to substantiate the charges through documents and other evidence.

Even so, they have relied on Lauricella completely on such crucial matters as how he came to work for Waste Management. Lauricella first told investigators that when they met at Roy’s Cafe, Odell, Clark and Cahill “had no idea who he really was . . . that they only knew him as ‘Tony Bergschneider.’ ”

But if prosecutors could show that Waste Management had consciously recruited a career criminal to sabotage Cadiz, the case would be that much stronger. After securing a plea agreement, Lauricella went before the grand jury in September and told an explosive but exceedingly sketchy story about being recruited in a bar in Las Vegas--where he was importuned for an unspecified assignment by a man he didn’t know, and told to go to the desert and await instructions. Only later, he said, did he reach the conclusion that the stranger had been Cahill.

“It is such a ludicrous story,” said one of the defense lawyers, Brian Hennigan. “It’s not only impossible to believe the story; it’s impossible to believe that anybody would believe the story.”

But prosecutors and grand jurors evidently did. When the indictment came down last October, Lauricella’s recruitment by Cahill in Las Vegas was cited as “overt act number one” of the conspiracy.

Waste Management and the executives--Odell, Clark, Cahill and former Vice President Robert Morris--each face 20 counts of conspiracy, stock fraud, stealing trade secrets and preparing false evidence. With few exceptions, the deeds charged were committed by Lauricella alone, but the executives were accused of being part of a ring directing his acts.

But defense attorneys say prosecutors have confused hardball politics with criminal skulduggery. Waste Management lawyer Robert Bonner, a former U.S. attorney and federal judge, said the case could become the San Bernardino County equivalent of the McMartin Pre-School fiasco--a notorious child molestation case that lasted seven years, cost millions and ended with the defendants going free.

Four county officials also have pleaded not guilty to various charges. Valerie Pilmer, county director of land-use services, is charged with hiding Rail Cycle files from investigators and then lying about it. Ex-planning commission Chairman Michael W. Dombrowski and his wife, a county employee, are charged with soliciting funds from Waste Management and other firms for a planning organization--but keeping the money.

Former county worker Philip E. Smith, 64, processed documents relating to the dump, and he allegedly abetted Waste Management’s search for dirt on Cadiz by providing it with Cadiz documents filed with the county. For this he was charged with the same 20 felony counts as Waste and its executives.

A former Air Force colonel, Smith spent seven years as a prisoner of war during the Vietnam War and wrote a book about it.

Smith “is a fellow who has a pretty firm grasp on the concept of honor . . . and duty,” said his attorney, Jan Handzlik. He “did his job properly at all times” and “expects to be found not guilty.”

As for Lauricella, he wound up with a 52-month sentence on the felonies that drove him into hiding in the desert. His plea agreement with San Bernardino County authorities got him another six years, but will add little to his prison time because it is to be served concurrently with his other sentence. He will be freed in 2001.

He is now in Chuckwalla Valley State Prison in Blythe. But he is expected soon to revisit the place where he unleashed a legal firestorm. When the Waste Management trial begins in September, Lauricella will be the key witness.