Having waged successful campaigns against several rival landfills and recycling centers across southeastern Louisiana, Fred Heebe set his sights in 2009 on taking out the competition next door: the publicly owned Jefferson Parish dump, adjacent to Heebe's River Birch Landfill. And he didn't need much of an opening to do it. ONE MAN'S TRASH The final article in a...
Having waged successful campaigns against several rival landfills and recycling centers across southeastern Louisiana, Fred Heebe set his sights in 2009 on taking out the competition next door: the publicly owned Jefferson Parish dump, adjacent to Heebe's River Birch Landfill. And he didn't need much of an opening to do it.
Seizing on what appeared to be a throwaway line in a 400-page parish document seeking proposals to dispose of grass clippings and tree limbs, Heebe somehow landed a $160 million contract to dispose of all household garbage collected in Jefferson Parish for the next 25 years.
Not only was it one of the most lucrative contracts in parish history, it came with a big bonus: The parish had to shutter its dump for a quarter of a century. The provision promised to give River Birch a long-sought monopoly that would make it the only landfill in an 85-mile radius permitted to take residential, commercial and industrial waste -- potentially allowing the dump to jack up its prices.
But the landmark deal began to fall apart before it even took effect, as Heebe and his stepfather, River Birch co-owner Jim Ward, became targets of a sweeping federal criminal investigation.
A grand jury began subpoenaing documents concerning the contract in late 2009 after the revelation that the wife of then-Parish President Aaron Broussard's top aide, Tim Whitmer, had snagged a health insurance contract with River Birch a couple of years earlier.
Cranking up the heat
FBI agents raided the landfill's Gretna headquarters in the fall of 2010, and several months later came the bombshell indictment of former state Wildlife and Fisheries Commissioner Henry Mouton.
Mouton soon pleaded guilty to conspiracy for taking $460,000 in bribes from River Birch to lobby for closure of the rival Old Gentilly Landfill in eastern New Orleans.
Jim Ward, left, and his stepson Fred Heebe turned River Birch into a landfill empire.
The federal government cranked up the heat further on Heebe last June when prosecutors charged the landfill's chief financial officer, Dominick Fazzio, with helping to embezzle more than $1 million from a New Orleans construction management firm co-owned and run by his brother-in-law Mark Titus. With Titus cooperating under a plea deal -- initially, at least -- prosecutors used the case to try to pressure Fazzio to turn on Heebe.
But anyone who thought Heebe would simply roll over wasn't paying attention to the determination he showed in transforming a misfit tract of land in Waggaman into a wildly profitable landfill, and the bare-knuckled business tactics he has used to muscle out competition.
More than 95 percent of the targets in federal criminal cases end up pleading guilty. But Heebe has mounted a vigorous pre-indictment defense and has won some key victories, most notably the recusal of U.S. Attorney Jim Letten's office from the investigation.
The prosecutions of Titus and Fazzio, from which Letten's office is also recused, now may be in some jeopardy. Titus has continued to commit crimes while out on bond, according to the government, which wants to sentence him Oct. 10. Titus, meanwhile, has asked to withdraw his guilty plea.
All of that will make him a lousy witness against Fazzio, who has refused to cooperate and is scheduled to go to trial Oct. 22.Heebe, a lawyer who had been a front-runner for Letten's post in 2002 until his ex-wife and a former girlfriend made allegations of domestic abuse, is a rare target with the resources to go toe-to-toe with the federal government. He has hired a stable of high-powered attorneys for what promises to be an epic clash with the federal government, which isn't accustomed to dealing with such deep-pocketed and aggressive defendants.
Turning the tables
Letten's April 20 decision to step aside came six weeks after Heebe landed a haymaker -- unmasking federal prosecutor Sal Perricone as "Henry L. Mencken1951," a frequent commenter on NOLA.com who repeatedly trashed targets of federal investigations, including Heebe.
In a turn-the-tables flourish, Heebe hired a former FBI forensic linguist who had helped catch the Unabomber to compare Mencken's comments to a legal brief co-authored by Perricone, finding striking similarities. Perricone, who had been assigned to several cases linked to the River Birch investigation, admitted he was Mencken and resigned in March.
Heebe's legal team -- which includes Washington attorney Brendan Sullivan, who won appeals that overturned convictions for former U.S. Sen. Ted Stevens in a 2008 corruption case and Lt. Col. Oliver North in the 1980s Iran-Contra scandal -- notched another victory when U.S. District Judge Ginger Berrigan ordered the government to return some documents seized during the River Birch raid.
Resignations, indictments, plea deals
Although prosecutors clearly view Heebe and Ward as the big prizes, the interconnected investigations of River Birch and Jefferson Parish government have yielded a raft of resignations, indictments and plea deals.
Whitmer, who played a key role in setting up the River Birch contract, resigned in January 2010. Broussard resigned a few days later, and former Parish Attorney Tom Wilkinson, who negotiated the contract, stepped down two months after that.
Whitmer pleaded guilty months ago, and Wilkinson and Broussard entered guilty pleas earlier this week. All of them saw their charges dramatically reduced; it's not yet clear what kind of cooperation they might provide.
None of the charges faced by the former parish executives involved the River Birch contract. But civil suits filed by two rival firms allege a conspiracy between River Birch and Broussard's administration as the momentous contract mushroomed from a parish recycling committee's small-bore recommendation to keep vegetation out of the parish's Waggaman dump.
A request for proposals to dispose of such "woody waste" was drawn up in the fall of 2008, but Whitmer directed that it be expanded to include a line about proposals for other waste, including household garbage. "For lack of a better word, we're going on a fishing expedition and seeing what we can catch," Whitmer said at the time.
Attorneys for Waste Management, which runs the parish dump, filed a civil racketeering lawsuit accusing Broussard's administration of essentially fishing in a stocked pond, knowing River Birch would take the bait and submit a sweeping proposal to handle all residential trash.
In a deposition taken by Waste Management, Marnie Winter, who oversees the dump as the parish's environmental affairs director, said the decision to broaden the solicitation appeared to be influenced by someone outside the Broussard administration.
"I thought that some ... some extraneous entity was involved, had some input into those changes," Winter said in the deposition.
Asked whether she thought it was River Birch, Winter said: "I thought that they may have been, but, you know, it could have been others, anybody in the waste field."
'A complete overreach'
Winter and two other mid-level parish administrators who gave depositions said they were baffled by the urgency Broussard's top aides showed in seeking proposals and approving River Birch's bid, with Winter saying they acted "very hastily" in an "artificial rush to get it done."
The trio also said they were surprised by how little was done to assess the financial impact of a deal with such far-reaching consequences. Most notably, the parish agreed to close its dump, an asset worth $180 million by River Birch's own estimates, with no guarantee that it could obtain a permit to reopen it 25 years later.
Landfill engineer Rick Buller said he was stunned by River Birch's proposal to take all of the parish's residential waste. "It was a complete overreach of what I expected," he said in his deposition.
Another firm, Concrete Busters, submitted a narrow proposal to incinerate woody waste, but a parish review committee recommended accepting River Birch's proposal. Winter was not included on the committee, in violation of a parish law that requires that the head of the department be involved in evaluating contract proposals.
In June 2009, the seven-member Parish Council unanimously approved the River Birch contract, which was to take effect once current cells at the parish dump were filled, likely in early 2013. Heebe's wife, Jennifer Sneed, had resigned from her council seat in August 2008, a few months before the woody-waste solicitation.
In the weeks before the vote, four council members received $16,000 in allegedly illegal campaign contributions from River Birch funneled through shell companies controlled by Fazzio, according to a state Board of Ethics lawsuit filed in May. Current members Elton Lagasse and Cynthia Lee-Sheng and former members Tom Capella and Louis Congemi all said they had never heard of the firms and did not know the donations might have come from the landfill.
Broussard received a total of $40,000 in campaign contributions from the shell companies.
Savings trumpeted in Jeff
With the requirement for the parish to close its competing dump, River Birch stood to see a significant increase in spillover business from commercial, industrial and municipal customers that dispose of more than 100,000 tons of garbage at the parish dump each year.
Eliminating competition from the neighboring parish dump was so valuable that River Birch was willing to give the parish a huge discount on its tipping fees. Under a 20-year contract signed in 2000, River Birch was charging New Orleans $33.91 per ton, which was 58 percent higher than the $21.50 tipping fee it agreed to in the Jefferson Parish contract.
Last year, New Orleans persuaded River Birch to cut its tipping fee to $29.11 per ton, but even that reduced rate is 35 percent higher than what Jefferson Parish would have been paying.
The cut-rate tipping fee helped bolster River Birch's argument that the contract would save the parish money, a critical claim in selling the deal to the council and the public.
River Birch officials trumpeted eye-popping savings estimates of up to $60 million over 25 years. Broussard's administration pegged the savings more conservatively at about $20 million.
But after the deal caught the attention of federal investigators, a parish-commissioned study released last year concluded that Jefferson would actually save at least $9 million by continuing to use its own dump. The huge disparity owed largely to the different values placed on the capacity at the parish dump that would be preserved by sending all trash to River Birch.
Hard-charging style
After the parish filed a lawsuit seeking to void the deal, River Birch signed a consent judgment in December to walk away. Losing the nine-figure deal was a rare setback for the fiercely competitive Heebe.
With the feds breathing down his back, Heebe's aggressive nature shone through in a civil lawsuit he filed in 2010 against Electrolux over a pair of malfunctioning stoves and ovens he bought for his St. Charles Avenue mansion. Filed just three days before the FBI raid on River Birch's headquarters, the 12-page suit went into exhaustive detail about a litany of alleged defects, including backfiring burners, pilot lights that kept snuffing out, wild temperature swings in the double oven and a French top that took more than an hour to preheat.
Heebe, who demanded that Electrolux put his family up at a comparable home while the stoves were replaced, settled out of court. The terms were not disclosed.
Heebe's hard-charging style appears to be a natural fit for the economics of the trash industry.
With the value of most long-term garbage-disposal contracts tied to the rate of inflation, there's little or no incentive for landfill owners to save capacity for the future -- especially with growing competition from alternative disposal methods and the risk of more stringent regulations in the future. It can foster a mindset in which owners seek to fill their dumps quickly to lock in profits and reduce the chance they'll be stuck with what is essentially a worthless hole in the ground.
In landing the Jefferson Parish garbage contract, River Birch fended off a last-minute counter proposal from a firm pushing gasification, a process that atomizes waste into gas. At the time, Heebe said such waste-to-energy solutions are a pie-in-the-sky waste of money.
It was a minor speed bump for River Birch, but the fact that Heebe felt compelled to respond showed how seriously he took any threat to his waste stream.
Asked by a reporter whether he was worried that the Jefferson contract would push River Birch to capacity sooner than expected, Heebe suggested that would be a boon.
"It would certainly shorten our life," Heebe said. "But it's got to be filled sometime."