Charges fly over hauling of trash

Over the last four years, trash has brought only trouble to the Los Angeles County city of Gardena.

Officials have been hit with lawsuits and a record $70,000 state fine for failing to recycle enough. And there have been allegations of political favoritism, poor service and unfair rate hikes.

The two companies that hold city contracts include one hauler who used to run a business that was at the center of a bribery scandal. The other is owned by an executive with the Commerce Casino, known for donating generously to political candidates across the county.

Some of those contributions have gone to several Gardena council members, including Los Angeles County Assistant Sheriff Paul K. Tanaka, who is Gardena’s elected mayor.

Tanaka accepted $5,000 in political donations from the Commerce Casino and its top executives in 2004 and then cast a deciding vote in 2005 to award an $8-million residential trash contract to a company owned by casino director Haig Papaian.

Of all the city’s trash travails, however, none has been as publicly roiling as the one that recently threatened the reelection of Councilman Oscar Medrano Jr.

One challenger accused Medrano of trying to pressure commercial waste hauler Kosti Shirvanian into giving up routes worth $360,000 per year and passing them to Papaian, who had publicly complained that his residential contract was not profitable enough.

Medrano denied the allegation and was reelected -- but not before another council member asked pointed questions about a private Jan. 18 dinner attended by Medrano and the two trash haulers.

There are at least two versions of how their dinner conversation went -- and one of the haulers, Papaian, declines to talk about it.

The men met at Cherrystones Grotto & Grill a few days before the council was to consider starting a long process that would end Shirvanian’s contract. (Unlike Papaian’s contract, Shirvanian’s included a provision requiring that the city give him five-years notice before severing their deal.)

Customer complaints

The council move was proposed by officials who said they had received customer complaints. Shirvanian’s dealings with the city have been controversial dating to 2003, when competing haulers claimed the city unfairly granted him an exclusive right to haul trash, thus forcing them out of town.

According to Shirvanian, Medrano said during the dinner that the council would stop plans to terminate his contract if he would turn over some business to Papaian’s company, Phoenix Waste & Recycling. Another councilman, Steven C. Bradford, Shirvanian said, also stopped by. (Bradford denied he participated in the conversation.)

Medrano has a different recollection: He said Shirvanian set up the dinner and volunteered to give up the business without any promises about his contract. The councilman said he never agreed to halt plans to terminate the contract with Shirvanian’s firm, Waste Resources of Gardena.

“What Kosti wanted was somebody to deliver something that couldn’t be delivered,” Medrano said. “Kosti wanted me to shift the votes around. But I can’t do it. It’s not how I do things. It’s not me. He made it up out of thin air.”

Records show that the next day, Shirvanian sent Medrano and other city officials a letter outlining his intention to give some routes to his competitor and thanking the councilman for agreeing not to start the contract termination process. At the council’s Jan. 23 meeting, however, officials proceeded to do the opposite and sent Shirvanian a contract-termination letter. Medrano voted in favor.

During the meeting, Tanaka said it made good business sense to schedule the end of Shirvanian’s contract. Vendors perform best, the mayor said, when they know they must rebid for a contract.

Councilman Ronald Ikejiri was the lone dissenting vote, saying he was concerned about Medrano’s dinner with Shirvanian and Papaian. He said council members should conduct business in public and allow city staff to negotiate with vendors.

“What was so perplexing to me is there was a meeting and it was only a few days before the Jan. 23 meeting,” Ikejiri said of the dinner. “Our city attorney has always admonished us to always allow the professional staff to handle negotiations.”

Steve Sherman, a 25-year Gardena resident who closely monitors politics in the city of 61,000, said he has watched with concern as the council awarded trash contracts to political donors.

“I wouldn’t be a bit surprised if campaign contributions have an influence on them,” Sherman said.

Papaian and the Commerce Casino have donated to Tanaka, Bradford and Councilwoman Rachel Johnson, records show. Bradford also accepted money from Shirvanian’s employees in an unsuccessful run for state Assembly.

And Medrano acknowledged in a recent interview that Shirvanian had twice bought him dinner since he was elected to the council -- gifts he failed to report on state conflict-of-interest forms.

In 2005, Tanaka and Bradford cast key votes in a 3-2 council decision to award the residential trash contract to Papaian’s company. In addition to support for Tanaka’s campaign, Papaian’s casino and its employees have been strong supporters of the mayor’s boss, Sheriff Lee Baca. The casino and its employees have contributed more than $25,000 to Baca’s political campaigns. The casino also contributed more than $100,000 to Baca’s charity, the Sheriff’s Youth Foundation, on which Papaian sits as a board member.

Neither Tanaka nor Papaian returned several calls for comment.

In addition to operating what has been described as the world’s largest poker club, Papaian has a lengthy background in the waste management industry. He helped run his father’s company, Haig’s Disposal, from 1971 to 1980, and then operated Haig & Haig Inc. until 1997. Gardena was the first city in which his new company, Phoenix, was awarded an exclusive contract.

Corruption scandal

Shirvanian, meanwhile, is the former owner of Western Waste Industries, which was entangled in a political corruption scandal more than a decade ago.

In 1996, former Compton City Councilwoman Patricia Moore was convicted of extortion and tax fraud after confessing to receiving from $500 to $1,000 a month from a Western Waste vice president to ensure her support for the firm. Neither Shirvanian nor Western Waste was charged with any crime.

Councilman Medrano said he had allowed Shirvanian to buy him dinner in Pasadena last year and at Lawry’s in Beverly Hills after he was elected to the council in 2003.

Medrano said he failed to report the dinners -- officials must reveal all gifts worth $50 or more -- because he was not aware that dinners could be considered gifts. He said he recently amended his conflict-of-interest forms to add the Shirvanian dinners as gifts.

“We didn’t have anything big,” Medrano said, recalling the Shirvanian dinner in Beverly Hills. “It was an entree. My wife had probably one or two glasses of wine. It was $60 or $70 or maybe $80. For me and my wife it was under $100.

“When I went out to dinner with him in Beverly Hills,” the councilman continued, “he had no contract. He wasn’t doing business with the city. He was just creating a company.”

Asked who paid for the Jan. 18 dinner at Cherrystones, Medrano said, “I don’t remember. It might have been Haig.”

stuart.pfeifer@latimes.com