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What’s That (ugh) Smell?

Hydrogen Sulfide Off the Sunrise
Landfill? Or Clark County Pols?

by W. W. Anderson

fter decades of polluting the Nevada landscape, ripping off taxpayers, defrauding governments and gouging thousands of Clark County businesses, the Silver State Disposal Service garbage monopoly this summer sort of got its fingers rapped by the City of Las Vegas.

big-gcan.gif (22612 bytes)The company was given a 15-year extension of its government-granted monopoly when it had wanted one that would run 20 years.

The contract is worth an estimated $3 billion. And because it was bestowed some seven years before the old pact was up, Las Vegas is now wed to its smelly partner until the year 2021.

According to an observer close to the Las Vegas City Council, it is not a coincidence that the city’s new 15-year pact with Silver State says nothing about meeting state and federal goals for diversion and recycling.

Silver State makes most of its money from the truckloads of waste that get dumped into the company’s Apex landfill northeast of Las Vegas. As a consequence, critics assert, the company’s management for years has been massively resistant to all efforts—whether federal, state or private—to expand the recycling of solid waste.

Former Clark County health district supervisor Vic Skaar says that when he retired in March it was “in great frustration.

“In almost seven years,” he said, “I was not able to influence the [Silver State] diversion and recycling rates.”

During all that time and still today, the Silver State mindset, he says, has been that “everything had to go to the landfill.”

The source at city hall points out that “the contract just signed [in July] has no diversion goal requirement.” That is even though the Nevada legislature has committed the state to the federal government’s goal —  recycling at least 25 percent of total waste generated within the state’s cities.

“They [state lawmakers] did this in ’91, and said that by ’93 there should be programs in effect to promote this,” says Skaar. “Well, that’s good when they talk that, but in Clark County there is no attempt to increase recycling. Rather than even being close to 25 percent of a recycling/diversion rate, we’re down around 12 or 13 percent.”

According to the city council source, Silver State’s refusal to even attempt to meet the goal means that the new city contract with the garbage monopoly basically leaves the municipality “up the creek.” Now if the Las Vegas garbage monopoly’s lack of compliance makes the city forfeit any moneys, city taxpayers are on the hook.

“The city has no recourse, as it has no enforcement clause in the contract,” worried the source, resentful that Councilman Michael McDonald and two allies this summer had passed the controversial 15-year garbage monopoly extension.

“That leaves the city and county with absolute liability, under federal law.”

For over a generation now, the history of waste management in Southern Nevada has more or less been a long series of “Oops!” statements by public officials. And by some not-so-strange coincidence, almost every one of those “Oops!” statements reveal “mistakes” by city and county officials that just happened to channel illegitimate cash into the pockets of men running Silver State’s government-created garbage monopoly.

Three years ago the entire top hierarchy of the company ended up as plea-bargaining felons heading for jail. U.S. government prosecutors had shown that the Silver State execs had schemed to raise Southern Nevadans’ garbage rates by reporting false financial information.

With the Silver State ship on the rocks, the remaining top manager, “recycling” chief Steve Kalish, had flown to Florida and pitched the company to H. Wayne Huizenga. Instrumental some 18 years before in the formation of Waste Management—the largest waste disposal firm in the world—Huizenga had left the trash business in 1986. Then, later, he’d started gravitating to the field again under the banner of his new company, Republic Industries Inc. Soon mergers and purchases had made Republic North America’s fourth largest trash disposal firm.

By the end of July, 1997, Huizenga had purchased Silver State for $378 million. He announced that the company’s name would remain the same and that the existing Nevada management—to the extent that it wasn’t headed for jail—would remain in place.

“Republic likes SS just the way it is,” said an August 1997 Las Vegas Sun headline. For anyone who had hoped for a fundamental reform of Silver State and its, er, “mutually benevolent” relationship with elected politicians, the reports were not heartening.

Kalish told the Sun: “If someone took the month of August off and came back in September, they wouldn’t notice a thing,”

There would be no housecleaning and no effort to transform—or even look closely into—the company’s culture. That was not the way Republic Industries worked. Its general rule was to keep the original management at the companies that the conglomerate acquired in place. In fact, virtually nothing would change—not even the company logo would be tweaked.

The previous year, Silver State attorney John Moran Jr. had been forced out of his defense counsel post during the trial of the company and its top executives. That was necessary, argued the prosecution, because Moran, too, had received off-the-books construction services for which the company had billed the public. Now however, Moran was back and publicly characterizing the transition as a mere “bit of housekeeping.” So the message from Huizenga and the Republic Industries management was clear: The new owners’ priority was not a clean slate at Silver State.

Well, what was their priority? What, if anything, did Huizenga’s nearly 20 years with Waste Management say about the possible mindsets at Republic Industries?

Waste Management turns out to be perhaps the most hated company in the environmentalists’ pantheon of devils. According to Mother Jones magazine, the firm operates “through a maze of subsidiaries-within-subsidiaries, thereby limiting liability when something goes wrong, as it often does.” The magazine notes that WM has paid millions in EPA fines.

Even more disturbing may be a report issued by the Ventura County Sheriff’s Department in September 1991, tracing the company’s record back to its very beginnings in the 1970s. The report showed the company’s criminal record largely involves monopolization, footsie with organized crime, and political corruption.

The bottom line for Southern Nevada, as expressed by one Las Vegas observer, was simple: It was highly unlikely that Silver State Disposal Services would soon be changing its spots.

Of course, given the long-standing political culture of Southern Nevada, it also wasn’t very likely that enlightened ethics from Clark County elected officials would soon be blowing the minds of the garbage guys either.

Even the activities of the Silver State hierarchy had been no real surprise to top public officials in Clark County. Actually, some of the officials themselves had been complicit in the company’s frauds.

Take for example the man who is—according to a Las Vegas Review-Journal examination—the highest-paid public official in the state: Manny Cortez, president of the Las Vegas Convention and Visitors Authority since 1990 and for 14 years before that a major power on the Clark County Commission.

One of the first plea-bargains in the case revealed that Cortez too had received bounteous “free” construction services from the top Silver State executives. Then, costs of the work were hidden in the inflated garbage pick-up costs presented to the county.

In a written plea agreement, Silver State foreman Frank Meccariello admitted doing the construction projects on company time for several individuals, including singer Wayne Newton and Cortez. The work, he said, was authorized by Vice President Richard Isola, who was his immediate supervisor since 1984.

For Newton, Silver State installed roofs on barns and patched up, according to the plea bargain, “a swimming pool that was used by Wayne Newton’s horses.” The company also provided the materials used to repair the pool.

At the home of Cortez, said Meccariello, he built a patio and a block wall. He also, according to the plea agreement, performed maintenance on a sprinkler system.

When newspaper reporters tried to contact Cortez about the charges, he repeatedly refused to comment. It may be relevant, however, that it was during Cortez’s reign on the Clark County Commission that the county agreed to become totally dependent on Silver State not just for collection, but for landfill services also.

The background here is that Clark County’s main landfill in the late ’80s—Sunrise Mountain—was federal land leased by the county; Silver State was hired to manage the site. But new federal environmental regulations scheduled to come online in 1993 promised to be too strict for the Sunrise site to qualify; it had long been clear an alternative landfill would be needed. From the late ’80s on, commissioners were lobbied by Silver State to not establish any new county site, but instead agree to depend on a new commercial site that a Silver State subsidiary named DUMPCo was establishing at Apex. Commissioners compliantly declined to insure an alternative, and by late 1993 when Apex opened, Silver State had achieved a monopoly not only on garbage collection in the county but also on county landfill services.

Although commissioners in the fall of 1993 hired the G.C. Wallace engineering and consulting firm to identify federal land that the county might obtain as a fallback should Silver State’s Apex landfill not be available, the Wallace study was shelved soon after submission in 1994.

Two years later in 1996, however, with the top hierarchy of Silver State clearly headed for jail, the study was suddenly pulled out. Commissioners now talked of buying the top prospect identified by the Wallace study—a 2,560-acre site north of Nellis air base.

“The county is just trying to cover its tracks,” charged Clint Combs, of R.C. Waste Management, at the time. He noted that the county health department had long been arguing that if Silver State’s landfill should become unavailable for any reason the county would have no place to take its trash. But commissioners had kept siding with Silver State, which opposed any alternative to its Apex site.

The Nellis site, the county soon discovered to its surprise, was no longer available. Although at the time of the Wallace study the location had been classified by the Bureau of Land Management (BLM) as available for disposal through sale or trade, that classification, the county now found, had in the interim been quietly removed. During the intervening years, officers of the Silver State company had actively given thousands of dollars of campaign contributions to Senator Harry Reid (D-NV). It is known that at the time, from his powerful seat on the Senate Appropriations Committee, Reid was pressuring the Las Vegas BLM office to give special assistance to his large contributors (see “Reid Breathes Fear into Nevada BLM,” Jan. 12, 1997 Electric Nevada). But by press time, it was unclear what specifically had led the BLM to reclassify the Nellis land.

At any rate, Silver State’s landfill monopoly in Clark County remained secure.

Soon, however, despite that monopoly—placing both the county and city over the Silver State barrel—the firm often began to find itself frustrated. Exorbitant rates the monopoly was imposing on businesses in the Las Vegas Valley were increasingly backfiring, generating counter-moves and even competition in the marketplace from small entrepreneurial firms.

Rob Dorinson, president of Evergreen Corp, a construction waste management company, says that recycling in the Las Vegas Valley is now a $25 million business. And most of that business has arisen, he argues, because of attempts by Silver State to exploit its monopoly by gouging valley businesses. A good example, he says, is the Apex landfill’s tipping fees—the charges leveled by Silver State’s DUMPCo subsidiary for allowing trucks to tip and dump their loads.

“The tipping fees are so high [that] all of the construction site clean-up companies are now in the re-cycling business,” says Dorinson. “Silver State created it. When the tipping fees are high, it pays to recycle—because it reduces the volume.”

So, he says, the construction site clean-up companies increasingly separate, remove and sell the cardboard, lattice, plastic and wood left in their boxes on the construction sites.

The tipping rates Silver State charges at the Apex dump have also led companies to start compacting the trash being taken there. At the Sunrise landfill Silver State had charged $2.50 per cubic yard, but once Sunrise closed, the firm raised its charges at Apex to $4.50 per cubic yard. Facing the higher costs, many of the small site clean-up companies began using mechanical means to crush their materials into less space.

That also did not please Silver State executives.

“For months we were running compacted loads at [a price of] $160 to the transfer stations, dumping them there,” says one owner of a clean-up company. “And then suddenly one afternoon, after loads that morning, they were saying, ‘No, it’s $640.’ And nobody could say squat.”

He recounts another time, years ago, when he and his workers were “smashing trash” and taking it to the Apex landfill.

“They stopped me and made me go pay $2,250 in their main office on Sahara before they’d allow me to dump,” he says, adding that the same thing happened to other companies.

“They said because it was compacted waste, they wanted to charge a 15-to-1 ratio—which is ridiculous, because you can’t get 15-to-1 anyway,” he observes. “The best you can get with compacted waste is a 4-to-1 ratio—and that is after compacting the hell out of it.

“After that they started inspecting our loads. We would dump the load in the landfill, and there would be a guy right there, during the dumping, filming it as it came out of the box.”

The purpose, he says, was to document whether the waste had been compacted, and so subject to Silver State’s new punitive anti-compacting rate.

According to Dorinson, the eventual result of such continuing harassment of the recyclers was even more innovation. It occurred to some of the clean-up companies that the volume of waste could be further reduced — by grinding the wood, cardboard and paper into much smaller particles. 

And at that point, he says, they discovered young Ryan Williams, of Lincoln County, and Western Elite—the three-year-old start-up composting company the 21-year-old is attempting to run with the help of his father and Las Vegas attorney Lamond Mills.

In the composting process, refuse is sorted and ground up, then placed in long piles on the ground or deposited in mechanical systems, where it is degraded biologically.

A state environmental panel, responding to a complaint against Williams by Silver State, ruled in May that Western Elite had much more inventory on its 40-acre site than allowed by its permit and had to remove it by mid-October. The panel also accepted Silver State charges that the whole operation was just a ruse to run a landfill under the pretense of a composting company.

Currently Western Elite is appealing the ruling in district court, and so far, according to at least one source, has found a friendly judge.

Skaar, the former health district supervisor for Clark County, gave a deposition in behalf of Western Elite to the state environmental commission. Skaar not only thinks the little company’s operation is legitimate, but—along with Mills, a vice president of the company—is now representing it.

“They are trying to compost—and they’re doing a pretty good job of it; it just takes a long time,” says Skaar.

The reason, he says, is “because there’s no bacteria in wood. So you’ve got to put some organic material in there; you’ve got to put bacteria in there. And that would enhance the composting, and return the stuff to beneficial use.”

Last month, he notes, Western Elite was ready to appear before the Las Vegas City Council to protest the city’s pending award to Silver State of a contract to pay the monopoly to bury nitrogen-rich sewage sludge—bio-solids in the language of scientists—in the Apex landfill.

“That’s wrong,” stresses Skaar. “That’s absolutely incorrect…. The EPA has declared that material to be a re-usable resource, and they directed each state to establish programs to [use it].”

Not only does Western Elite have a dire need for some of the nitrogen-rich sludge, says Skaar, but “that’s what we [long-time solid waste professionals] had in mind. That’s what this should be all about. But instead it goes to the landfill. These guys [at Western Elite] can’t even have access to it.”

Dorinson and Skaar both note that bio-solids, virtually everywhere in the United States except Clark County, have market value—precisely because of the materials’ usefulness in composting.

“Sludge,” says Dorinson, “is being sold around the country because it can be composted. It’s valuable. But here Silver State has it set up so they get paid for taking it and just dumping it.”

In a way, Dorinson says, the garbage monopoly is in a corner.

“If Silver State were to recognize that these bio-solids have a use, someone will soon ask, ‘Why didn’t someone else get to bid on it?’

Then, he says, “the next question [will be], ‘Well, if it has value, maybe we can get someone to take it for nothing. Why should we pay Silver State? Let’s open it up to bidding.’

“See,” says Dorinson, “that opens up a whole can of worms they don’t want to open up. Now you [would] have people diverting some of it. That means less goes to the hole. It’s less that they collect. That costs them money.”

It is the same reason, he says, that Silver State is actively trying to use its current political power to crush its small potential competitor—Western Elite.

The garbage monopoly, he asserts, is quite aware that Western Elite already has a demand for its product and “feedstock” for its process. All the little company needs, says Dorinson, are the bio-solids that would greatly speed up the process.

And, he says, “Silver State knows that. They don’t want [Williams] to get his hands on [the sludge].” That would further demonstrate the rationality and cost-effectiveness of recycling and of companies like his own, that save money by taking construction-site clean-up trash “60 miles out of town, rather than a few miles up the road to Apex.”

On the city council the point man for Silver State’s campaign to get all Las Vegas solid waste turned over to it long-term has been Councilman Mike McDonald. The 34-year-old college dropout and former bicycle cop on the Las Vegas Strip also has fronted the company’s drive to get city sludge locked safely in the Apex landfill.

Because Silver State and its related companies had given McDonald at least $38,000 in campaign contributions, reporters recently asked why the councilman had not publicly announced the issue and/or recused himself from the vote.

It wasn’t important, said McDonald, arguing that the $38,000 he received on the record from the garbage monopoly was only a small percentage of the overall $700,000 in re-election funds he had been able to collect. But as councilman, McDonald’s annual salary is $37,525—even less than the Silver State contribution. McDonald also did not reveal how much he collected from a private high-donor fundraiser that Silver State president Steve Kalish had hosted for the councilman at a Pecos Road tavern Kalish owns.

Notwithstanding his financial links to the company, McDonald actively worked to arrange the garbage monopoly’s multi-billion-dollar Christmas-in-July. “Friendship aside,” he said, “business is business.”

Reporters raised the friendship issue because the councilman reportedly is also close personal friends with both Kalish and Silver State’s general counsel, Robert Groesbeck. When Groesbeck was arrested in September on charges he had publicly groped a woman’s breasts and dropped his pants, McDonald declared, “I will stand by my friends through thick and thin.”

But the councilman has yet a third personal tie to Silver State: He regularly dates the garbage monopoly’s 23-year-old paid lobbyist for “government affairs.” McDonald told state ethics commissioners that the relationship had ended by the time the $3 billion-plus contract was awarded, but the couple, to this day, continue appearing together in public.

Little wonder McDonald is often thought to be—forgive the expression—in bed with the garbage monopoly.  NJ

W. W. Anderson (wwanderson@netlane.com) a former reporter for California newspapers, recently moved to Clark County. An earlier form of this story appeared on the Electric Nevada website, http://www.electricnevada.com.


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