By Dan Christensen, FloridaBulldog.org
Eight months ago a Broward judge determined that it is more likely than not that Waste Management committed a crime or fraud in connection with its attempts to influence federal and state antitrust regulators.
What have those authorities done about it? Nothing, apparently.
Government attorneys at the U.S. Department of Justice and the Florida Attorney General’s Office reviewed Waste Management’s then-proposed $525 million acquisition of competitor Southern Waste Systems (SWS) to determine whether it would adversely affect Broward’s nearly 2 million residents. The regulators’ ostensible goal: to preserve competition, protect citizens and enforce antitrust laws.
The deal is today at the heart of a lawsuit brought by Bergeron Environmental and Recycling LLC against Waste Management and Anthony and Charles Lomangino, Charles Gusmano and John Casagrande and their LGL Recycling. LGL, formerly known as Sun Recycling, was the SWS division that partnered with Bergeron Environmental in the joint venture Sun Bergeron, which for five years had recycling contracts with 19 Broward cities. Bergeron Environmental is seeking tens of millions of dollars in damages claiming that Waste Management misled regulators to win approval of its takeover of SWS as part of a conspiracy to ruin its business and steal its customers.
The Waste Management/SWS deal was allowed to go through in January 2016 under secrecy the law permits. Today, however, with Waste Management once again in command of the county waste stream, a million Broward residents are paying more to dispose of their garbage, and recycling – an official goal of the state – has waned.
Kylie Mason, a spokeswoman for Florida Attorney General Ashley Moody, said, “As our office is not a party to the active litigation involving a dispute between private parties in Broward County, it would not be appropriate to comment. However, our office continues to monitor the situation, as well as trash hauling and disposal markets in general.”
A Justice Department spokesman, Jeremy Edwards, declined to comment.
The inaction of regulators is curious because it follows a torrent of noteworthy federal and state political contributions that went to those who oversee them.
For example, trash mogul Anthony Lomangino, who made millions when he sold SWS’s assets to Waste Management, gave $150,000 last year to the Patriot Legal Expense Fund Trust. Internal Revenue Service records show the trust was set up to help President Donald Trump’s associates caught up in ex-special counsel Robert Mueller’s probe into alleged Russian interference in the 2016 election.
Two years before, Lomangino co-hosted an Oct. 24, 2016 breakfast fundraiser with then- candidate Trump at his Mar-a-Lago Club, where Lomangino is a member. Attendees paid $10,000 each, or gave or raised $100,000 per couple.
Federal Election Commission records show that since 2016 Lomangino personally has contributed more than $330,000 to Trump’s campaign and a joint fundraising committee, Trump Victory. Lomangino also gave heavily to the Republican National Committee, while spreading thousands more around to Republican parties in more than 20 states.
Lynda Lomangino, his wife, often doubled her husband’s contributions on the same day. For example, on Jan. 9, 2018 contributed $125,000 each to Trump Victory, and a month later, on Feb. 7, each wrote four identical checks to the Republican National Committee totaling $182,100. The grand total on those two days: $250,000 to Trump Victory and $364,200 to the RNC.
The Florida Attorney General’s Office under Moody’s predecessor, Pam Bondi, gave its green light to the Waste Management/SWS deal in December 2015. In the six years before, as Bondi campaigned for election and re-election, Waste Management gave more than $150,000 to the Republican Party of Florida, Gov. Rick Scott and Bondi, Florida Bulldog has reported.
Bondi, now a partner in the influential Washington, D.C. lobbying firm Ballard Partners, and now-Sen. Scott received little of that money directly. State election records show that instead nearly $147,000 went to the Republican Party, which recycled much of it back to the campaigns of Bondi, Scott and other top Republicans.
Under Bondi and fellow Republican Moody, the state has displayed little interest in Bergeron Environmental’s allegations that it essentially was duped by Waste Management into approving its acquisition of SWS. That disinterest extends to ignoring Bergeron Environmental’s request to the court for permission to transmit confidential records it has obtained to both the Florida Attorney General and the Justice Department. The records were turned over by Waste Management during the discovery phase of the lawsuit. The matter has not yet been ruled on, although both Broward Chief Judge Jack Tuter and the Fourth District Court of Appeal recently denied the trash giant’s bid to keep secret numerous internal documents about the antitrust investigations.
The Attorney General’s Office also sought a protective order to prevent the chief of its antitrust division from having to testify under oath about the deal. Lizabeth A. Brady wrote a Dec. 3, 2015 “closing letter” to Waste Management attorneys notifying them that her office wouldn’t block the company’s buyout of SWS. That letter remained secret until last year when a clerk’s error made it public and Florida Bulldog published it. It contained a number of “agreements or commitments” made by Waste Management to ensure state approval. Chief among them was a pledge to allow the Broward cities that contracted with Sun Bergeron for single-stream recycling to renew their contracts for five years at the same prices before they expired in July 2018.
But the cities were never told about the letter, and it was not enforced. Instead, Waste Management and LGL Recycling demanded fee hikes of up to 100 percent before they would agree to renew. Some cities, like Coral Springs, accepted the fee hikes to keep recycling going. Others, like Sunrise, did not.
Further, the Florida Attorney General’s Office closed its eyes to an interesting piece of evidence that has emerged publicly despite all the secrecy. That is a consulting agreement between Waste Management and Sun/LGL Recycling executive John Casagrande signed at the time the SWS deal closed.
Casagrande, a former Waste Management vice president, was to be paid $5,442.31 a week, or $283,000, and was also made LGL’s “designee” to Sun Bergeron’s board. But the consulting agreement also contained a covenant in which Casagrande agreed not to compete with Waste Management. So once he joined Sun Bergeron, it could no longer legally compete with Waste Management.
The noncompete appears to violate the terms of the closing letter written by the Florida Attorney General’s antitrust chief the month before. Among the “representations” made by Waste Management to secure the letter were pledges that after the SWS deal was complete, Sun/LGL would remain “obligated to make its former facilities available to the JV [joint venture Sun Bergeron] for competitive activities” and that Sun had agreed to allow Sun Bergeron’s municipal customers to extend their recycling contracts on the same terms and prices until at least July 2023.
Meanwhile, Waste Management should soon get an opportunity to rebut Bergeron Environmental’s criminal allegations at a hearing. The company’s lawyers used confidential documents obtained from Waste Management to convince Judge Tuter last fall that they “established a prima facie showing of crime-fraud.” The documents still are not publicly available.
The hearing has been delayed by Waste Management’s efforts to maintain an extraordinary level of secrecy in the case by keeping its documents confidential and excluding the public and the press. The courts, however, have rejected Waste Management’s arguments, ordering both documents and the hearing to be open.