IESI Corp. contributed to political campaigns, partnered with local haulers, bought out others
When household garbage is trundled to Jefferson Parish curbs, whether destined for the landfill or a recycling center, it's now more than likely to pass through the hands of a single company. IESI Corp., a waste management conglomerate based in Fort Worth, Texas, has bought out or outbid most of its competition in Jefferson, landing it a lucrative trifecta of garbage contracts.
Trucks from IESI Corp. and other haulers line up to dump their loads at the Jefferson Parish landfill.Already managing Jefferson's curbside collection service since 2009, IESI is poised also to run the parish's landfill operations and its new recycling program. Those contracts were awarded by unanimous Parish Council votes, beginning in 2008 and ending in December. Collectively the deals are worth more than $170 million to IESI, according to estimates from the parish Environmental Affairs Department.
"It's a lot of money," council Chairman Elton Lagasse said. But IESI has "been doing our garbage pick-up now, and -- I'm serious -- I haven't heard a complaint."
He later added: "This is very unusual, but I've heard people say this is the best garbage collection we've ever had."
The five-year Jefferson garbage collection contract is estimated to be worth $91.6 million. The five-year recycling contract is valued at $11.3 million. The landfill management contract is expected to last 12 years and be worth at least $67.5 million.
The contracts were awarded years apart, and IESI offered winning proposals on each. "I think it's just more you took each one separately," Councilwoman Cynthia Lee-Sheng said.
Although a relative newcomer to Jefferson, IESI does have connections. It employs Barry Bordelon, Lagasse's former council aide. Bordelon worked as an IESI consultant in northern Louisiana, but Smith said he didn't do any work for the company in Jefferson. Bordelon "has not even spoken to me about it," Lagasse said.
IESI also has hired Ramelli Waste Services of Kenner and Metro Disposal Inc. of New Orleans as subcontractors under the state's minority, disadvantaged or woman-owned business program, Smith said. Ramelli collects garbage from about 14,000 households and Metro services drop-off sites, Smith said.
The company has contributed roughly $24,000 to council members and parish presidents Aaron Broussard and John Young since 2007, campaign finance records show.
"Everybody donates to campaigns, and that's pretty much all we do," said Phil Smith, a regional vice president for IESI. "Everything is within the law."
Entering the market
Founded in 1995, IESI has grown into one of the largest waste management firms in the country. It entered the Louisiana market in 2000, acquiring companies and contracts in northern and western parts of the state. It made a play for Jefferson's garbage collection contract in 2003 but lost to Waste Management Inc.
When Hurricane Katrina struck two years later, IESI didn't sit idly by. After merging with BFI-Canada and eventually forming a parent company called Progressive Waste Solutions, IESI bought Coastal Waste Services of Slidell in 2008, Solid Waste Disposal Inc. of Houma in 2010 and SDT Waste and Debris Services in June. A few weeks later, IESI announced it had also acquired the Recycling Foundation of Baton Rouge.
"We've always been interested in the south Louisiana market," Smith said. "You just have to wait for the right time to get in."
IESI's business moves coincided neatly with Jefferson's searches for garbage contractors. In 2008, the Parish Council picked Coastal Waste, already an IESI subsidiary, to handle collection. In 2010, it picked IESI to take over operations of the Jefferson landfill. And in December, IESI got the nod to reintroduce curbside recycling in unincorporated Jefferson Parish and Jean Lafitte.
IESI Corp. has won all three of Jefferson Parish's garbage contracts, for collection, recycling and landfill management.It's not the first time a single company has dominated Jefferson's waste stream. Before Hurricane Katrina struck in 2005, Waste Management controlled all three. But Waste Management fell into hot water with parish officials after the storm because it was slow to restart its collection services.
Young said he isn't terribly concerned that IESI essentially has a monopoly over Jefferson Parish's waste stream.
"In the past we had Waste Management," he said. "It wasn't a problem, but for Katrina."
Waste Management still runs the Jefferson landfill under an agreement that parish officials expect will end in March 2013. IESI is slated to take over, but not until a bevy of interwoven lawsuits can be untangled.
Litigation delays
Trouble began in 2009, when former Broussard's administration sued Waste Management. The plan was to end their landfill operations contract to pave the way for a newly minted agreement with the privately owned River Birch landfill. Under that deal, most residential waste would go to River Birch, and the public dump would be shut down for the next 25 years.
A federal criminal investigation into River Birch and a change in parish administrations changed that. Instead, Young's administration sued River Birch to nullify its contract, and River Birch abandoned the agreement earlier this month.
That left the outstanding lawsuit against Waste Management from the previous administration. With the River Birch plan nixed, Young's administration asked that the parish's case against the garbage giant be dismissed. However, Waste Management protested, asserting the suit was filed "in bad faith" and that the company is owed damages.
Additionally, Waste Management sued the parish for choosing IESI, alleging in court documents that Waste Management's proposal to continue running the landfill received higher marks overall from a parish evaluation committee. IESI had received a better technical score, though its proposal was more expensive. Considering the price to be negotiable, the council chose IESI.
Until the litigation is ironed out, Waste Management continues to run the public dump.
"Right now we have a contract with Waste Management, and Waste Management is under the contract to complete the cells," said Parish Attorney Deborah Foshee. "We expect Waste Management to fulfill its contract."
IESI's acquisition of the Recycling Foundation all but assured its hand in curbside recycling as the council deliberated for five months over which offer to select. Five companies submitted proposals, and three of them -- IESI, Richard's Disposal Inc. and Waste Pro of Louisiana -- had arrangements to partner with the Recycling Foundation. IESI's buyout guaranteed it had a 3-in-5 chance of getting a piece of the program before the evaluation committee ever checked the proposals.
The council chose IESI in December, and service is set to begin in June.
. . . . . . .
Richard Rainey can be reached at rrainey@timespicayune.com or 504.883.7052.