D.A. Is Sued by Firm He Linked to Mob : Trash: Company that wanted to open private landfill says it was defamed by report the D.A. made at request of county supervisors.

By TOM GORMAN

Oct. 14, 1992 12 AM PT

TIMES STAFF WRITER

The nation’s largest trash company Tuesday sued San Diego County Dist. Atty. Edwin Miller, alleging in U.S. District Court that he maligned the company by claiming it has ties with organized crime.

Waste Management Inc., which is based in Oak Brook, Ill., and does business in San Diego, El Cajon, Oceanside and in unincorporated areas of San Diego County, charged that Miller’s organized-crime claims are not only false, but that he refused to allow the company to respond to his allegations before publishing them.

Miller made his claims in a 58-page report last March to the County Board of Supervisors. The county board asked Miller in November, 1990, to conduct a background check of the company because it wanted to operate a privately owned landfill at Gregory Canyon in North County, which was in critical need of a garbage dump.

The report was sought by Supervisor Susan Golding, who said at the time that she was aware of innuendo about the company’s involvement in organized crime. The supervisors agreed that before doing business with the company, the county’s top prosecutor should investigate its background and detail any links to organized crime that he could substantiate.

In issuing his report that was 15 months in the making, Miller warned county officials that “extreme caution” should be exercised by public agencies considering doing business with Waste Management.

In a chapter titled “Organized Crime Connections,” Miller opened: “Historically, the refuse industry has been reputed to be infiltrated by members of organized crime. In many instances, this is a well-deserved reputation.”

He went on to identify several situations that he said showed Waste Management ties to organized crime. The report focused on allegations that various company officials had criminal links before they worked for Waste Management, or that companies taken over by Waste Management had previous ties to organized crime.

Waste Management officials immediately described Miller’s reference to organized crime ties as “particularly malicious and scurrilous,” and hired the Los Angeles law firm of O’Melveny & Myers to conduct its own investigation of the company.

That report concluded that Miller had offered “a few anecdotes which for the most part have nothing to do with Waste Management or anyone ever associated with it. To imply a link to organized crime without a shred of evidence, as the (Miller) report does, is irresponsible and inexcusable. . . . There is not now and never has been any connection between Waste Management and organized crime.”

But Waste Management said it was still reeling from Miller’s report that, the company says, has received worldwide notoriety, tainted the company’s reputation and scared off new customers.

Company officials want Miller to retract his allegations--and insist that all copies of the report be recalled so the offensive chapter on organized crime ties can be destroyed.

“He has deprived us of our constitutional and civil rights by maligning us,” said Steve Bergerson, senior vice president and general counsel for Waste Management. “He has branded us without a hearing, without any due process, and we can’t tolerate that.”

The company is not seeking monetary damages, Bergerson said.

Steve Casey, spokesman for the county district attorney’s office, said the lawsuit has been referred to the county’s legal counsel for review. “We understand Waste Management has brought numerous lawsuits in the past, and so this is not a huge surprise,” he said. “The suit has no merit.”

When Miller began his investigation, he asked Waste Management to turn over any documents he might request, to promise not to sue the county over the contents of the report and to pay for the cost of the probe.

In response, Waste Management offered to turn over any documents not protected by attorney-client privilege, to pay up to $75,000 to cover the costs of the investigation, and to waive any lawsuits against the county if it could first read the report and allow contents in dispute to be resolved through binding arbitration.

Neither side came to agreement and Miller produced the report without Waste Management’s cooperation.

Waste Management spokeswoman Gaye Soroka in San Diego said the company didn’t take suing Miller lightly.

“We responded to the D.A.’s report by hiring O’Melveny & Myers, but Miller’s report continues to show up around the world, where we’re doing projects,” Soroka said. “We don’t look easily at suing public officials. It’s not something the company does. But because of the falsehoods in that (organized crime) chapter and the fact that that chapter has been cited by competitors on many of our projects, we felt we had to attempt to rescue the reputation of the company.”

In its lawsuit, Waste Management complained that Miller referred to a 1962 civil complaint by the Wisconsin state attorney general in which he alleged that several disposal companies doing business in his state had links to organized crime. One of those companies was owned by a person who later became a founder of Waste Management. That lawsuit, Miller said in his report, was ultimately dismissed.

Waste Management said that, before Miller’s report, “no one has ever implied that the action (in Wisconsin) suggested a connection” between the firm and organized crime.

For Miller to refer to that 30-year-old case in his report, Bergerson said, “was absurd.”

The second connection between Waste Management and organized crime, according to Miller, involved the 1984 acquisition by Waste Management of a majority of shares of SCA Services Inc., which at the time was under Justice Department investigation.

In its lawsuit, Waste Management said the acquisition of SCA “was accomplished publicly and under the review and with the approval” of the Justice Department.

“We didn’t acquire anybody or anything that had any taint,” Bergerson said Tuesday.

The third instance cited by Miller that was attacked in the Waste Management lawsuit involved the company’s acquisition of Universal By-products, owned by a man who, according to Miller, “had been the target of organized crime investigations for some time.”

Waste Management previously had given Miller’s office documents showing that the man “never had any affiliation” with the company, the lawsuit contended.

Because of Miller’s allegations, Waste Management has been “condemned with a badge of infamy, has been officially condemned to an odious status and has been subjected to a deprivation of (its) good name, honor and reputation by being branded as companies having organized crime connections,” the lawsuit said.

Bergerson said the company had hoped that the Miller report would not receive much currency when it was issued because “it was so obviously deficient on its face, so superficial.”

“But unfortunately, it’s being distributed; competitors use it; some activist groups use it. It has a tendency to pop up both here and abroad.”

He said he had no idea how much business, if any, the company has lost because of the Miller report. “Lots of times you don’t know when you’re missing an opportunity (for business) because nobody wants to deal with you. You’re the target of a whisper campaign. It’s outrageous and we felt somebody shouldn’t be able to do that under color of law.”

Bergerson said that, by filing the lawsuit, “we can get into discovery to find out what Miller thinks he has to support his allegations, because there is nothing to support those allegations.

“If we were the least bit worried that there was a smoking gun, we wouldn’t have brought suit,” he said.

County supervisors, meanwhile, have decided not to do business with Waste Management at its Gregory Canyon site.