By Dan Christensen, FloridaBulldog.org
In December 2015, Florida Attorney General Pam Bondi’s office cut a secret antitrust deal with Waste Management that allowed it to complete its big money acquisition of Southern Waste Systems and Sun Recycling, including Sun’s Broward recycling facilities.
In the six years before the agreement, as Bondi campaigned for election and re-election, Waste Management contributed more than $150,000 to the Republican Party of Florida, Gov. Rick Scott and Bondi.
Bondi and Scott received little of that money directly. Instead, state election records show, nearly $147,000 went to the Republican Party, which recycled much of it back to the campaigns of Scott, Bondi and other top Republicans.
The state’s accord with Waste Management included a number of pre-merger “agreements or commitments” that were spelled out in a confidential letter to the trash company’s lawyers by Lizabeth A. Brady, Bondi’s chief of multistate antitrust enforcement. They included Waste Management’s pledge that Sun, since renamed LGL Recycling, would allow cities to renew their single-stream recycling service contracts for another five years at the same terms and price – about $50 a ton – when they expire next month, the letter said.
For unexplained reasons, Bondi never told the intended beneficiaries – the 17 Broward cities that contract for recycling with a joint venture co-owned by Sun named Sun Bergeron – about the deal. The cities, representing about half of Broward’s population, are Coconut Creek, Coral Springs, Deerfield Beach, Fort Lauderdale, Hillsboro Beach, Lauderdale-by-the-Sea, Lauderhill, Margate, Miramar, North Lauderdale, Oakland Park, Pembroke Park, Plantation, Sunrise, Tamarac, West Park and Wilton Manors.
The deal became public late last month when Florida Bulldog obtained and published regulator Brady’s Dec. 3, 2015 letter.
Besides not informing cities, Bondi also has not sought to enforce her office’s antitrust “understanding” with Waste Management – including agreements that cities believe would avert imminent, hefty price increases now being demanded to recycle their trash. Her office has declined to comment.
Public disclosure of the Attorney General’s letter has spurred cities to action.
Coral Springs spent weeks negotiating a new five-year recycling contract with Waste Management that was fast-tracked for approval at last Tuesday’s commission meeting to beat a July 2 deadline when it was suddenly yanked off the agenda. The proposed $96-a-ton contract, featuring a 120-day escape clause that could force the city to pay even higher costs should today’s bad market for the sale of recyclables get worse, was expected to serve as a template upon which other cities could piggyback.
“It’s nothing against Waste Management. I just wanted to make sure our residents are protected,” said Commissioner Dan Daley, who pulled the item with the support of his fellow commissioners. “I was on the commission when we entered into our current contract and tipping fees were cut in half. Now we’re right back to where we were several years ago.
“If you gave assurances that you would make good on a renewal for the existing contract at the same prices, you need to do that,” Daley said. “Changing market conditions are not my problem. You have to eat that.”
One day before Coral Springs acted, a lawyer for the City of Sunrise formally notified the Sun Bergeron joint venture [JV] that based on the Attorney General’s letter it was exercising its option to renew its contract at the lower pricing through July 2, 2023. “If Sun Bergeron’s written concurrence is not received on or before June 15, 2018 the City intends to pursue all available remedies,” wrote attorney David S. Dee.
On Friday, Palm Beach Gardens-based LGL Recycling, a partner in Sun Bergeron, shot back with “a complete rejection of your unfounded interpretation” of the Attorney General’s letter.
“LGL has not and will not, consent to the JV’s renewal of the agreement on the same terms, conditions and pricing. LGL is under no requirement to do so,” LGL executive John Casagrande wrote to Dee. He noted that given the “well-publicized collapse of the worldwide recyclables commodities market” such renewals with cities “would most certainly result in unsustainable losses.”
Today, with expiration of the existing Sun Bergeron recycling contracts just three weeks away, what happens next is up to Sunrise and the other cities.
On Friday, Sunrise Mayor Mike Ryan called on Attorney General Bondi to take “immediate administrative action to enforce” the Waste Management agreement.
“If this hadn’t come to light now, in weeks we’d be trying to explain to residents and businesses why their rates doubled. Now we’re fighting,” Ryan said in an interview. “Why hide something that was so critically important to protecting the financial health of the municipalities?”
The state’s review of Waste Management’s takeover of assets of Southern Waste Systems (SWS) and Sun Recycling was made to examine how the deal would impact “competition in Broward County for waste disposal and recycling and the operation of the Sun Bergeron Joint Venture.”
Sun Bergeron is owned 50-50 by LGL Recycling and Bergeron Environmental and Recycling. Owner Ron Bergeron, the wealthy Davie businessman, is suing his partners, claiming they sold the recycling facilities and permits used by Sun Bergeron and its city customers behind his back. LGL is countersuing.
Bergeron attorney Mitchell Berger has sought to depose Brady about the letter and the antitrust review of Waste Management’s $525-million buyout of SWS. The Attorney General’s Office is resisting.