Is Recology fudging the figures on how much SF waste is being diverted from the landfill, with the complicity of city officials?
San Francisco elected officials frequently celebrate the ambitious citywide goal of sending zero waste to the landfill by 2020, an environmental feat widely viewed as attainable since the current waste diversion rate stands at a stellar 80 percent.
Official city numbers — based on reporting by Recology, a company that has a monopoly on trash collection and curbside recycling in San Francisco — demonstrate that only 20 percent of all city dwellers' trash ends up in a landfill, that unenlightened dead end for matter discarded from our lives, never to be reprocessed.
Yet a lawsuit against Recology exposed some inconsistencies in the company's record keeping. It also shed light on how some material counted as "diverted" is routinely sent to a landfill anyway, a practice that muddies the concept of the city's Zero Waste program but is nevertheless legal under state law.
On June 17, a San Francisco jury determined that Recology misrepresented the amount of waste diverted from the landfill in 2008, enabling it to collect an incentive payment of $1.36 million for meeting the goal. The verdict compels Recology to pay the money back to the city, since it was obtained after submitting a false claim.
The outcome of this lawsuit — brought by a former manager of the Tunnel Road recycling Buy Back facility, who also claims he was retaliated against for trying to expose fraud — highlights some larger questions. Was this inaccuracy unique to 2008, or are Recology's numbers always a little fuzzy? Are there adequate safeguards in place to prevent the company from fudging the numbers, particularly when both company and city officials have an incentive to exaggerate the diversion rate? And if what's on paper doesn't quite square with reality, is San Francisco really keeping as much garbage out of the landfill as the city's Department of the Environment says it is?
Attorney David Anton, who represented the former Recology employee, Brian McVeigh, said he found it odd that San Francisco officials didn't show much interest in collaborating to recover the bonus money, even though millions of dollars was potentially at stake. Since damages are trebled under the False Claims Act, cited in the lawsuit, Recology could ultimately be made to fork over the incentive payment three times over.
"The city's representative in the Department of the Environment actually testified that he hoped this lawsuit would be unsuccessful," Anton recounted. He guessed that officials remained on the sidelines because in San Francisco's political power centers, "relationships with Recology are so close and tight. It was a very strange thing," he went on, "to be pursuing this lawsuit, trying to get money to the city, and the city's representatives are saying, 'we don't want it.'"
Recology has filed post-trial motions in a bid to have the penalty reduced, "asking the court to decide whether there was any evidence at trial that there were public funds in the Diversion Incentive Account, and if so, how much," explained Recology spokesperson Eric Potashner. "We expect a ruling this summer."
Department of the Environment spokesperson Guillermo Rodriguez told the Guardian that Robert Haley, manager of the department's Zero Waste team, was unavailable for comment before press time. With regard to the lawsuit, Rodriguez noted, "The city has been following the trial closely and is awaiting the judge's ruling on post-trial motions before determining any reaction."
The False Claims Act is designed to recover damages to government when false statements are made to obtain money or avoid making payments. It has a provision allowing whistleblowers, such as McVeigh, to lead the charge on seeking civil enforcement action. The whistleblower may be eligible to receive a share of recovery.