Contract Offered for Money, Trash Haulers Say

A politically connected businessman promised to deliver a lucrative Compton city garbage contract if the firms seeking the business paid him at least $1 million, two garbage haulers have said.

The separate accounts of the two waste haulers’ competing efforts to do business in Compton share a common theme: Executives at each business said Michael Aloyan told them he could get them contracts if they paid him.

After they refused to pay, the Compton City Council last year awarded Aloyan a 15-year contract to collect the garbage, according to the haulers. The contract is estimated to be worth $100 million in gross revenues.

Michael Adnoff, a vice president at CalMet Services, said Aloyan told him in late 1999 that there was “almost a guarantee” he could get CalMet’s residential contract renewed for a $1-million fee and that “there was a good chance” he could get the firm the more lucrative commercial contract.

That contract was then held by Waste Management, which wanted to keep the business. John Newell, a lawyer for Waste Management, said Aloyan told one of his company’s executives he was confident he could get residential and commercial contracts himself and sell them to the firm.

The companies’ accounts, given in interviews with The Times, raise questions about whether Compton officials ceded control over multimillion-dollar contracts to Aloyan.

Aloyan, a close friend of former Compton Mayor Omar Bradley, testified as a federal witness in the mid-1990s that he had ferried bribes on behalf of business interests to two other former Compton council members in the early 1990s. He did not respond to repeated requests for comment. His attorney, Richard Haft, had previously denied Waste Management’s account. Haft declined to comment on CalMet’s allegations.

Bradley, who was mayor at the time the franchise was awarded to Aloyan, said he did not know of any conversations Aloyan may have had with the two waste haulers. Bradley said his vote with the majority in the City Council’s 4-1 decision last year to award the franchise to Aloyan was made in the best interests of the city, giving residents improved services at a fair price.

“I have nothing to do with the deal, other than I voted for it,” said Bradley, now a private citizen who is contesting in court the mayoral election he lost last year.

CalMet’s Adnoff said that some time before the vote, he ran into Bradley at a municipal convention. “Bradley said he was disappointed we did not work out an arrangement with Aloyan,” Adnoff said.

Bradley, whose brother is employed by Aloyan as safety director, said he had no recollection of the conversation.

Two other members of the council majority voting to award the franchise to Aloyan, Bradley allies Amen Rahh and Delores Zurita, did not return calls seeking comment. The fourth, Marcine Shaw, said she followed the recommendations of city administrators. “As far as I’m concerned or know,” she said, “it was a clean deal.”

Bradley said CalMet and Waste Management might be trying to ruin Aloyan by going public with their stories because they are angry they lost lucrative contracts.

The former mayor, who is African American, charged The Times with racism for pursuing the story. “If this wasn’t a black city, and if your paper wasn’t controlled by whites, this wouldn’t be an issue,” he said. “I want you to leave me alone.”

Aloyan allegedly made his first offer to sell a Compton waste-hauling contract in late 1999, not long after municipal elections in Compton in which Bradley-backed candidates cemented control of the City Council.

At the time, a company called CalSan, which held the city’s residential contract, was being acquired by Metropolitan Waste Disposal. The new enterprise was renamed CalMet.

Such acquisitions are not unusual in the Southern California garbage industry, which has been marked by consolidation in recent years as smaller companies have struggled with costly modernization necessary to meet tougher state recycling standards.

Aloyan had worked for CalSan in the mid-1990s after it had acquired another trash company that employed him as general manager. That trash company, Murcole, held the Compton residential trash contract before it was absorbed by CalSan.

Seeking to get the council to renew its contract, CalSan officials said they made charitable contributions and campaign contributions to City Council members, including Bradley. Company officials said they also proposed better service.

CalSan’s lawyer at the time, Richard Haft, who now represents Aloyan, advised executives that this conventional approach would be fruitless, Adnoff said.

Haft counseled CalSan that “the only way you’re going to get the agreement is to use Mike Aloyan,” Adnoff said.

Haft declined to comment.

In his discussions with CalSan and CalMet in late 1999 and early 2000, Adnoff said Aloyan claimed he could renew or extend the contract for CalMet if CalMet made him a 50% partner in the contract or paid him $1 million.

“He said the residential was almost a guarantee,” Adnoff said. “He thought there was a good chance he could get the commercial.”

Aloyan did not explain why he was confident the council would give the residential contract to whomever Aloyan directed, Adnoff said.

But Aloyan “made it very clear that the contract was under his control and whoever was going to get it was going to have to deal with him,” said VerLyn Jensen, then a lawyer for Metropolitan, now an attorney for CalMet.

Jensen said Thomas Blackman, a Metropolitan executive who is now president of CalMet, told him Aloyan had asked for a sum in the “very substantial seven figures” for securing the franchise. Blackman, through Jensen, declined requests to be interviewed.

The money would be paid only when the contract was secured, Jensen said.

Jensen said CalMet rejected Aloyan’s offers because “we refuse to get into any arrangement that would smell of corruption.”

It is lawful in almost all California jurisdictions for a lobbyist to be paid on a contingency basis, like a salesperson on commission, for helping obtain a government contract. Aloyan’s alleged activities would be illegal if they involved collusion with the City Council, said San Francisco attorney Jim Sutton, a specialist in California political law.

Aloyan is a well-known figure in Compton politics.

After emigrating from Armenia in 1987, he worked his way up to become general manager of Murcole, holder of the Compton residential contract, and in the early 1990s, he later testified, he acted as an intermediary for its president’s secret payoffs to a politician.

Testifying as a federal prosecution witness in 1995, Aloyan said he passed a $5,000 check from Murcole through another intermediary to Walter R. Tucker III, then Compton’s mayor, in exchange for Tucker’s vote in favor of a rate hike. Aloyan also testified that he arranged for a $2,500 contribution to Tucker’s congressional campaign in return for a vote in favor of extending Murcole’s contract.

Tucker denied receiving any payments but testified that Aloyan had offered him a $100,000 bribe and part ownership in a proposed card club project. Tucker said he turned Aloyan down. Jurors deadlocked on the counts involving Aloyan’s testimony, but convicted Tucker on other charges of extorting payoffs.

Aloyan, who testified under a limited grant of immunity, was not charged with any crime.

The same investigation yielded a 1996 prosecution of Patricia Moore, then a Compton City Council member. Aloyan testified that he paid her to soften her opposition to the card club proposal. Aloyan passed checks from a gambling corporation to Moore’s campaign manager, according to testimony.

Aloyan testified that he gave her checks for nonexistent consulting services so that she would not stand in the way of his casino plans. Jurors voted to convict Moore for receiving illegal payoffs.

Hearings held in connection with Moore’s case produced other evidence of corruption in Compton’s waste operations. Federal agents said Moore had confessed to secretly receiving monthly payments from the firm that held the city’s commercial waste-hauling contract, Western Waste Industries.

Western Waste was later acquired by Waste Management.

As contracts held by Waste Management and CalMet neared their mid-2000 expiration dates, the Bradley-led City Council voted to end private contracting. They decided to form a city sanitation department.

Aloyan was hired at $300,000 a year to set up and manage the department. The city prepared to issue $6 million in bonds to pay for garbage trucks, bins and other equipment.

On May 5, 2000, six days before Aloyan signed his formal management agreement with the city, Aloyan approached a Waste Management executive with an offer to sell his company for $4 million, said Newell, the Waste Management lawyer.

As The Times reported last month, the Waste Management executive asked why Waste Management should pay so much for a company whose only asset was a $300,000 consulting contract.

Newell said Aloyan’s response was, “ ‘I’ll have the city.’ ”

Newell said the executive, whom he would not identify by name, understood Aloyan to mean he was confident of not just managing, but owning the city garbage-collection franchise.

Newell said the executive reported the conversation to him just after it happened because it was suspicious that Aloyan would offer to sell a franchise he did not own.

“Obviously, we didn’t do it,” Newell said.

Eight months later, Aloyan’s alleged prediction came true. The City Council, led by Bradley, voted to award him the city’s hauling contract for 15 years, allowing Aloyan to use garbage trucks and other equipment bought with the city’s low-interest municipal bonds.

Aloyan paid a franchise fee of $2 million to the city and agreed to repay principal and interest on the bonds. No other firms were invited to bid.