SEPTEMBER 1991 - VOLUME 12 - NUMBER 9
C O R P O R A T E P R O F I L E
Trashing the Future
by Brian Lipsett
As major corporations rush to co-opt the rhetoric and image of the environmental movement--and in some cases to co-opt the environmental movement itself--one company is far ahead of the pack. Reviled by grassroots environmental justice activists, Chicago-based Waste Management, Inc. (WMI), the largest U.S. waste disposal company, has, with some success, sought to portray itself as an enlightened, ecologically minded corporate citizen.
The best refutation of Waste Management's claims is its own record. During the company's rapid rise to the top of the waste disposal industry, WMI has left a trail of broken laws, poisoned communities and angry people. The company holds the dubious distinction of being the most heavily fined disposal firm in the country and is financially responsible for cleaning up a record 130 Superfund dumps. It has also chalked up a long list of felony convictions for price fixing.
Despite its legal problems, the company's sales and profits have skyrocketed. WMI's chief executive officer, Dean Buntrock, inherited Ace Scavenger Service, a Chicago garbage company, from his father-in-law in 1957. That year, the company had revenues of $750,000. In 1968, the merger of Buntrock's Chicago outfit and Wayne Huizenga's (his Florida cousin-in-law, now head of Blockbuster Video) garbage business led to the creation of Waste Management. In 1971, when the company's stock was first offered on Wall Street, its market value was $20 million; today, it is $19 billion. WMI's total 1990 revenue was $6.03 billion and its net income $685 million.
In addition to hauling garbage and operating landfills and transfer stations in virtually every U.S. state, WMI, through its 76 percent-owned subsidiary, Chemical Waste Management (CWM), operates nuclear and chemical waste landfills and incinerators and conducts toxic cleanup work for the U.S. government. Other divisions handle asbestos abatement and pest control services. Waste Management International operates in Europe, Kuwait, Argentina, Australia and many other nations.
Yet WMI has not had only good fortune. Recently, WMI and CWM's stocks (which are sold separately) have recently been on the slide. In August 1990, Barron's Magazine reported that WMI was padding its books (albeit legally) to show inflated earnings. WMI denied the charge, but its stock value plummeted $1.2 billion in heavy trading the day after the magazine hit the streets. Stock values have continued to slide since then. WMI officials blame a weak economy for their stock woes. But news about fines, explosions and negative court rulings may be the actual root cause. This is not a new experience for WMI: in March 1983, a number of environmental penalties and critical articles in major newspapers forced the company's stock value down by $1 billion over two days. In response, WMI launched a television and print ad campaign which, among other things, featured an endangered butterfly that WMI claimed to be protecting while operating a landfill. Said Buntrock, "I feel there's been too much emphasis on problems. It's time the public begins to hear about solutions."
An environmental miscreant
The fundamental solution that the environmental movement offers for toxic waste disposal problems is to stop producing waste. Environmentalists have called for industry to drastically reduce or eliminate the creation of toxic waste during the production of goods and for businesses and consumers to dramatically increase their recycling efforts. But, as "Trash into Cash," a recent Greenpeace report on WMI's environmental crimes and misdeeds, argues, "WMI is the leader of an industry inherently at odds with such positive approaches to the toxics crisis. Without waste, the industry would have no business." The report goes on to assert, "To maintain its status as one of the best buys on Wall Street, WMI requires a constant increase in waste. Its main line of business is at odds with the continued well- being of humans and other forms of life on earth."
"Even if WMI operated as a model corporate citizen," the Greenpeace report says, "its daily operations would contribute in major ways to the destruction of the environment." But the company falls far short of such standards.
Waste Management has been hit with a bewildering array of fines and citations for environmental violations. The Wall Street Journal reports that the company has paid more than $50 million in penalties and related settlements for environmental violations. At least 45 WMI waste sites have been found to be out of compliance with federal or state environmental regulations, according to Greenpeace, and, between 1984 and 1987, the company was issued more than 600 pollution violations.
In recent years, WMI and CWM have been slapped with some record environmental penalties. In February 1990, Chemical Waste Management agreed to pay the state of Illinois $280,000 to settle violations stemming from the release of a cloud of toxic gas from its Sauget, Illinois hazardous waste incinerator. In July 1990, CWM settled charges that it had accepted waste banned from its Emelle, Alabama landfill for $123,000.
In September 1990, CWM agreed to pay $3.75 million to settle EPA charges that the company had frequently overstuffed its South- Side Chicago hazardous waste incinerator, disconnected monitoring equipment, and routinely spilled PCBs without reporting the accidents. According to Greenpeace, one former worker at the incinerator reportedly said, "Breaking regulations was more the routine than the exception." In February 1991, an explosion at the incinerator forced its indefinite closure, pending a state investigation into the causes of the incident.
WMI and CWM's record may be catching up with them. In their 1990 10K reports filed with the Federal Securities and Exchange Commission, WMI announced that it was potentially responsible for cleanup costs at 105 Superfund sites and CWM cited an additional 25 sites where it was potentially liable for cleanup costs. The average cost of cleaning up one site is $25 million. WMI's potential liability is thus very great, especially since it carries only $10 million in pollution insurance. WMI admits that it cannot secure adequate liability insurance for itself or its subsidiaries.
Image is everything
A company which cares about its image but has as poor a record as Waste Management must naturally devote significant resources to public relations efforts. WMI has learned that nasty publicity can be counteracted by spreading money around. Accordingly, WMI has dumped money on the media, government officials and environmental organizations.
For example, WMI sponsors National Public Radio's news program "All Things Considered." Critics have dubbed the show "Almost All Things Considered," complaining that it avoids stories about WMI's troubles.
The company is a major contributor to political campaigns--and its donations have not always been above board. The Greenpeace report says that a federal Securities and Exchange Commission investigation determined that WMI operated a secret slush fund for unlawful political contributions in Florida between 1972 and 1974. The report further notes that the WMI Employees' "Better Govemment Fund" was the seventh largest corporate political action committee (PAC) in the 1988 U.S. elections, giving over $430,000 to candidates for U.S. Congress from 1987 to 1988. In 1990, according to the Institute for Responsible Politics, the PAC made $392,880 in political donations.
WMI has also made it a practice to hire former federal and state employees. WMI's vice president in charge of ethics, Joan Bernstein, was once a top EPA attorney. Other WMI employees include Angus McBeth, formerly of the Department of Justice, and Jeffrey Miller, formerly Director of Enforcement at EPA. Former Reagan Chief of Staff Howard Baker Jr. now sits on the company's board of directors.
WMI's deep pockets have enabled it to make significant inroads into the environmental community. Since 1987, WMI has made donations of more than $50,000 to the National Audubon Society, the National Wildlife Federation, the Nature Conservancy, the International Union for the Conservation of Nature and the World Wildlife Fund/Conservation Foundation. WMI executives sit on the boards of the Center for Marine Conservation, the National Audubon Society and the National Wildlife Federation (NWF).
WMI's strongest ties may be to the National Wildlife Federation, an environmental organization that has gone so far as to defend WMI's environmental record publicly. NWF President Jay Hair, in a letter to a number of people who objected to Dean Buntrock's presence on the NWF board, stated, "Waste Management, Inc. is conducting its business in a responsible manner." A former NWF staffer says that Jay Hair and Dean Buntrock are hunting pals. According to this source, Hair uses Buntrock's corporate jet for personal and NWF business.
Hair's relationship with Buntrock has landed him in hot water more than once. In one instance, the EPA Inspector General investigated a breakfast meeting set up by Hair at which Buntrock successfully lobbied EPA Administrator William Reilly to prevent state governments from enacting stronger hazardous waste laws than the federal government. Hair denied any impropriety and the IG cleared Reilly, Hair and Buntrock of wrongdoing. A subsequent congressional investigation, however, blasted the Inspector General for conducting a shoddy investigation of the incident.
WMI has made several attempts to become a member of the Environmental Grantmakers' Association (EGA), a loosely knit group of foundations that fund environmental organizations and projects. Several environmental groups protested proposals to allow Waste Management to join the EGA, charging that it would be outrageous to give WMI a role in setting the agenda for the environmental movement. Several EGA members also objected. In 1990, WMI was formally rebuffed. In a letter, EGA board members stated, "It is readily apparent that Waste Management Inc. has engaged in a pattern of abusive corporate conduct involving repeated violations of both criminal and civil laws, with the effect of endangering and degrading the environment." In spite of this, several EGA members continued to urge that WMI be allowed to join the association, and earlier this year, the company was successful in gaining entry into the organization.
Jack the Ripper's recycling program
With environmentalists charging it with interfering with efforts to reduce waste and promote recycling, WMI has publicized its recycling program. "We believe recycling is an important component of an effective integrated waste management plan. We annually invest millions of dollars in the company's recycling program, representing the largest recycling program in the world," says Geri Powell, a WMI spokesperson. "The program," she adds, "was a vision of our chairman Dean Buntrock, who saw a need for recycling and the importance of it to the environment."
Critics denounce the company's recycling program as cynical and, in some cases, fraudulent. They argue that the company's motives were revealed in 1988 by a company official who told his colleagues that their recycling efforts were valuable because they would "keep those yah yahs [recycling advocates and grassroots opponents of waste dumps] off our backs." Father Joseph O'Brien, of Our Lady Star of the Sea Church in Port Isabel, Texas and a leader in the successful fight to stop WMI's ocean incineration plans for the Gulf of Mexico, says, "Calling WMI CEO Dean Buntrock a recycler is like naming Jack the Ripper Surgeon General."
Several incidents reveal the hollowness of WMI's recycling claims. In Oceanside, California, grassroots leaders blew the whistle on an illegal WMI transfer station which was calling itself a recycling center. The complaint led the city to order WMI to shut down or go through a required permitting process. Grassroots leaders in Camden, Arizona witnessed WMI dumping newspapers collected for recycling in a landfill. WMI did not deny the charges of fake recycling. A Lafayette, Louisiana resident photographed WMI haulers mixing regular garbage with yard waste collected for composting.
A Pattern of Racism
WMI's plans to locate incinerators and landfills in cities and towns across the United States have sparked tremendous grassroots opposition.
Much of the opposition has come from predominantly black and Latino communities where, critics charge, a disproportionate number of WMI's most toxic operations are situated. According to Greenpeace's Charlie Cray, the author of "Trash into Cash," WMI's "racism is inherent to the siting of their facilities, and against their workers." Hazel Johnson, a resident of Altgelt Gardens, a group of townhouses in Southside Chicago, and leader of People for Community Recovery, says, "The majority of places WMI is located are where mostly black people live." She adds, "Their landfill is in our backyard. The hazwaste incinerator is a mile away.... The odor makes us sick."
In Kettleman City, in Central California, the California Rural Legal Assistance Center has filed two lawsuits on behalf of a citizen organization, People for Clean Air and Water (PCAW), against Chemical Waste Management and the state of California. The suits allege civil rights violations and violation of due process in the siting of an incinerator in Kettleman City. Forty percent of the residents of Kettleman City do not speak English and documents and hearings on proposals to site the incinerators were not translated into Spanish. Luke Cole, an attorney with the California Rural Legal Assistance Center, says the fact that each of the three existing and two proposed WMI hazardous waste incinerators is in a neighborhood composed largely of people of color shows a clear racist pattern of targeting minority communities. The population surrounding WMI's incinerator sites in Sauget, Illinois is 77 percent African-American, in South Chicago, 70 percent African-American and 14 percent Latino; in Port Arthur, Texas, 75 percent African-American; in Kettleman City, 95 percent Latino and in Emelle, Alabama, 80 percent African-American.
Chuck McDermott, a spokesperson for WMI, says it is "troublesome" that "the poor are asked to bear more than their fair share of pollution," but that "race has not been a consideration" in WMI's siting of incinerators and dumps. "The criteria [WMI] uses to select sites," he states, "are environment and market driven." He also notes that WMI did not have a role in siting many of its facilities, which were bought from other companies already operating them.
But PCAW's Mary-Lou Mares is not convinced by such arguments. "I think that they purposely site these things in minority communities. Can you see putting them in Beverly Hills?" she asks. "People in these communities don't have time to fight causes like this, they're too busy feeding their families. But people are starting to wake up."
Aiming to continue its rapid growth, WMI is turning its attention to overseas markets. Ten percent of the company's revenue already comes from its international division, according to Greenpeace's report, and the company's manager for Far East business development has predicted that Asia will replace North America as the biggest WMI customer within 20 years. WMI's operations in Europe--where it reportedly holds contracts with more than 300 communities--and in other countries, such as Mexico, are also growing quickly.
The most significant check on WMI in the United States has been the grassroots environmental movement. The efforts of local groups have made it extremely difficult to site a new incinerator anywhere in the country and have cost WMI a number of government contracts. Now, as WMI eyes new, global markets, the U.S. environmental justice movement--if it hopes to restrain Waste Management--will be confronted with the immense challenge of sparking and working with similar movements in other countries.
Brian Lipsett is a research analyst at the Citizens' Clearinghouse for Hazardous Waste.