The Cleanup Men Get Spattered

By Alexander L. Taylor III

Charges fly that Waste Management mishandled toxic garbage

In the dirty business of industrial garbage, Waste Management, Inc., of Oak Brook, Ill., has always presented a squeaky-clean face to the public. When outsiders visited a cleanup site in Seymour, Ind., for instance, they saw work crews in protective clothing taking samples from drums of hazardous refuse for white-coated chemists to analyze in nearby laboratories. Other neatly uniformed workers transported the waste to two of the company's 15 toxic-chemical disposal sites, where it was buried in a landfill under tons of clay or injected into a deep underground well. Such attention to niceties helped Waste Management become the U.S. leader in the disposal of hazardous garbage and made its stock a Wall Street favorite. Two weeks ago the shares were selling for almost $60, up from only $4 in 1975.

But last week some highly toxic public muck was flying in Waste Management's direction, and some of it seemed to be sticking. Former employees, including two who left to work for competitors and a third who was fired, charged that dangerous materials had been handled carelessly or even illegally. The attorney general of Illinois filed a $1.1 million lawsuit charging that 400,000 gal. of waste containing a potent carcinogen associated with dye manufacturing had been illegally dumped in a Calumet City landfill. And the company temporarily suspended disposal operations at an Ohio site after belatedly learning that PCB-contaminated oil had been improperly stored there. Waste Management's stock was hit by a huge sell-off at the beginning of the week that drove its price per share down some 18 points in two days, a loss of $800 million in the overall market value of the company.

To stem the losses, company executives called emergency meetings of financial analysts and reporters and issued a detailed rebuttal of some of the public charges. Stated Chairman Dean Buntrock, 51: "Many of the allegations appear to be patently false and totally without foundation." But he conceded that the charges would have to be fully investigated for the firm's credibility to be restored. By Friday the price of the stock had stopped its slide and recovered a third of the losses.

In part, Waste Management is a victim of heightened visibility brought on by the dioxin contamination of Times Beach, Mo., and the scandal in the Environmental Protection Agency over the program to clean up toxic wastes. Yet the company has been the target of a number of lawsuits, and it has been found guilty of price fixing in Georgia. Says Illinois Attorney General Neil Hartigan: "They are always saying the same thing, that it's just a technical mistake. What it is is corporate irresponsibility."

Thanks to its phenomenal growth, Waste Management has been able to shrug off such attacks in the past. Since its founding in 1968, the company has turned the mom-and-pop business of local garbage collection into the foundation of a very aggressive and highly profitable international operation. Today Waste Management disposes of refuse for 210,700 businesses and more than 2.4 million residences in 30 states, and has expanded into foreign cities as disparate as Buenos Aires and Jeddah, Saudi Arabia. Its 4,200 trucks constitute the largest garbage fleet in the world. Since 1979, Waste Management's revenues have grown from $381.5 million to $966.5 million last year, and profits have followed apace, increasing from $36.7 million to $106.5 million.

When Congress passed new environmental regulations in 1976, the company quickly began acquiring its own private sites for toxic-waste disposal. Manufacturers that accumulated hazardous wastes as a byproduct became eager customers, paying as much as 35 times the rate for ordinary trash removal to avoid the cost and headaches of figuring out how to comply with the tangle of federal regulations. Environmentalists complained, however, that Waste Management relies too heavily on landfill operations, which are less expensive and sometimes less safe than other methods of disposal.

Last year the company expanded into low-level-radioactive-waste management by buying Chem-Nuclear Systems, of Kirkland, Wash., for $65 million. An attempt to burn toxic wastes on the high seas, however, has produced nothing but trouble. The company has been seeking, so far unsuccessfully, a permanent Government license to operate its incinerator ships, aptly named Vulcanus and Vulcanus II, which it purchased at a total cost of $20 million. Denver Attorney James Sanderson, a political ally of then EPA Administrator Anne Burford, was asked to help guide the license application for the ships past some bureaucratic roadblocks. Earlier, while Sanderson was serving a tour with the EPA as a consultant, Waste Management benefited from a much disputed ruling that allowed it to store and then bury 1,500 bbl. of hazardous liquid waste in a landfill in Arapahoe County, Colo.

Waste Management is fighting the battery of charges in a variety of ways, none of which appears to involve burying techniques. Its meetings last week in Chicago and New York City, both chaired by Buntrock and attended by other top managers, attracted some 150 people and lasted, in all, almost five hours. The company has retained Washington Lawyers Jody Bernstein and Angus Macbeth, both former Carter Administration environmental specialists, to help defend it. At week's end all the players were sifting through the charges and denials and trying to get at the truth. In time it may seep out. By -- Alexander L. Taylor III. Reported by Jay Branegan/Washington and J. Madeleine Nash/Chicago

With reporting by Jay Branegan/Washington, J. Madeleine Nash/Chicago This file is automatically generated by a robot program, so viewer discretion is required.