|FBI records: Gasper Fiore knew how to pull the levers of political power — except one
Paul Egan, Detroit Free Press Published 5:10 p.m. ET Jan. 5, 2018 | Updated 4:50 a.m. ET Jan. 6, 2018
LANSING – Towing magnate Gasper Fiore knew how to pay off political officials, wine and dine top police bosses and secretly fund expenses such as campaign billboards, wiretap evidence filed in federal court shows.
But there was one fundamental part of the political process Fiore, 57, didn’t get, records show.
How to vote.
“Fiore spoke to (his daughter) Jennifer Fiore on May 26, 2016,” an FBI agent said in an affidavit seeking to continue a wiretap on Fiore’s cell phone.
“They began the conversation with Fiore asking his daughter how to register to vote.”
The apparent reason for the sudden interest?
Brian Banks, then a Democratic state lawmaker the FBI affidavit alleges was involved in "bid-rigging" for Fiore — and who also happened to represent the Grosse Pointe Shores district where Fiore lived — was in danger of losing his House seat in what was expected to be a close election.
Banks, who has prior criminal convictions but has not been charged in the Fiore case, denied the bid-rigging allegation Friday.
Banks issued a statement to the Free Press that said the Fiores were his constituents and "it was my normal practice to be an accessible state representative and a key focus of my office was for constituents to know that I worked for them and they could reach me personally, as many of them have my direct telephone number."
During the conversation the FBI recorded about how to vote, Fiore’s daughter “explained the process and told him to have the Secretary of State send an absentee ballot to the house and she would vote for him,” the affidavit said.
"Gonna be a close vote?" Gasper Fiore asked.
"I think ... think so," his daughter replied.
Banks won a hotly contested Democratic primary in 2016, as well as the general election. But he resigned his House seat in February 2017 when he pleaded guilty to a misdemeanor related to falsifying documents to obtain a $3,000 loan. Banks has prior felony convictions for financial crimes, such as credit card fraud and writing bad checks.
Banks is now a candidate for a state Senate seat in Detroit.
Gasper Fiore awaits a May sentencing on a bribery conspiracy charge after recently pleading guilty to bribing a township official in Macomb County to win a towing contract, as part of a wider corruption case, through a deal with federal prosecutors. He faces up to five years in prison.
The FBI affidavit and partial wiretap transcript prosecutors submitted in support of a wiretap on Fiore's phone — which was briefly unsealed through a defense attorney's filing error and obtained by the Free Press — show Banks offering assistance to Fiore family members in retaining a $2-million-a-year Michigan Department of Transportation courtesy van contract that was up for bid in 2016.
Recorded conversations between Gasper Fiore and his ex-wife, Joan Fiore, included in the affidavit suggest the Fiores wanted contract language that required at least five years' experience and would eliminate at least one competitor from eligibility. But the family eventually learned they would win the contract without the need for that language, the records show.
This week, the Michigan Department of Transportation released to the Free Press language that Banks requested to have inserted in MDOT budget legislation around the time the department was putting the courtesy van contract out to bid.
The wording submitted by Banks said that in soliciting proposals for contracted services, other than construction contracts, MDOT was to obtain assurance the contractor has "the financial capability, equipment, workforce, and prior work experience" to perform the service.
Including that language made sense, MDOT spokesman Jeff Cranson said.
Additional language submitted by Banks was adopted in the House version of the legislation but removed from the Senate version, at the urging of MDOT, Cranson said.
The language the Senate removed said MDOT couldn't spend money on a contract providing services to the public unless the contractor had completed a "pre-qualification process" prior to the department's release of a request for proposals.
MDOT viewed that language as too broad and felt it would "inhibit competition and also delay the procurement process," Cranson said. Though it makes sense for contractors to go through a pre-qualification process for certain types of jobs, it does not make sense for more routine tasks, he said.
Contact Paul Egan: 517-372-8660 or firstname.lastname@example.org. Follow him on Twitter @paulegan4. Staff writer Tresa Baldas contributed to this report.
Sun Jan 07, 2018 6:42 am
|Detroit Councilman Gabe Leland targeted in FBI investigation of towing titan Gaspar Fiore
Tresa Baldas and Katrease Stafford, Detroit Free Press Published 6:00 a.m. ET Jan. 8, 2018
Leland is being investigated for his ties to metro Detroit towing magnate Gasper Fiore.
When Detroit area towing magnate Gasper Fiore wanted to know what was going on in City Hall, he may not have had to reach out any further than his daughter's boyfriend.
For at least two years, Detroit City Councilman Gabe Leland dated Fiore's daughter, Jennifer, a relationship that has landed the 35-year-old councilman in the middle of an ongoing public corruption investigation by the federal government.
During that time, according to FBI wiretap records, Leland appeared willing to keep the Fiore family updated with information that might help their towing businesses. And on at least four occasions, Leland voted in favor of city contracts and extensions that benefited the Fiores, as reported by Fox 2 News last summer.
Leland, who was re-elected to a second term on the council in November, denied any wrongdoing when contacted by the Free Press last week. He has not been charged with any crime.
"Anyone that questions my integrity as a result of any personal relationship is also mistaken," Leland said. "My personal relationships have never gotten in the way of my responsibilities as a councilman."
During his relationship with Jennifer Fiore, records and wiretap evidence shows, Leland did some things that raised red flags for the FBI, including:
He voted for at least four contract extensions or amendments worth $2 million that went to Fiore companies, as Fox 2 first reported last summer.
He allegedly passed along information to the Fiore family about a covert police corruption investigation involving multiple police officers who accepted bribes from body shops and towing companies.
He set up a meeting with Detroit Police Chief James Craig where he allegedly sought inside information about the towing investigation.
Leland on Friday characterized his relationship with Jennifer Fiore, who is an executive in her family's businesses, as " on again and off again" but said the pair are no longer together.
Gasper Fiore pleaded guilty to bribery last month in the ongoing corruption investigation, which has already ensnared more than a dozen area politicians, business owners and others.
Boulevard and Trumbull towing in Detroit in May 2017.Buy Photo
Boulevard and Trumbull towing in Detroit in May 2017. The company is owned by Gasper Fiore of Grosse Pointe Shores. (Photo: Kathleen Galligan, Detroit Free Press)
Craig, Leland meeting
According to Craig, Leland hoodwinked him in setting up the 2016 meeting, pretending it was to discuss community initiatives when really, Craig said, Leland wanted an inside scoop on a towing investigation.
"Certainly when he set up the meeting it was not about towing. That I know for certain -- because if he would have said 'I want to talk about towing,' I would have said no," Craig said in a Free Press interview last week.
"He got nothing from me about the towing investigation," said Craig. "I contacted the FBI immediately following that meeting because of my concern of what he was trying to find out."
The FBI declined comment.
Craig described the meeting as one that turned strange, fast. He said when Leland started asking about the towing investigation, he started pressing him to explain why he was asking about towing. Then, he said, Leland got nervous.
Craig said before Leland arrived, he made sure to have a third person in his office.
"I never felt comfortable with him, and that's why I had someone in the office," Craig recalled. "When Leland left, my EPU officer said, 'Wow. He's extremely nervous.' "
Craig said that at the time of the meeting, he didn't know that Leland was dating Fiore's daughter. He said he didn't learn of the relationship until a few days later, when he called his legal counsel, Celia Washington, who had a friendly relationship with the Fiores.
"I said, 'Why is Councilman Leland coming to me asking about towing?' And she said, 'Well, there's a dating relationship between Leland and the daughter,' " Craig recalled Washington saying. "I said, 'Wow.' That's when my antennas went up."
In a statement Friday to the Free Press, Leland said he doesn't "recall the whole conversation because it was a few years ago," but asserted it stemmed from a concern raised by a resident.
"I remember addressing a concern from a constituent regarding a potential noise violation they heard late at night from a body shop or tow yard in my district," Leland said in an email. "The constituent thought it was related to an investigation they heard in the news involving multiple police officers, for which I later learned DPD internal affairs had investigated. Perhaps that is why the Chief was uncomfortable."
Craig told the Free Press Saturday that when Leland asked to meet, it's possible the initial request may have indeed stemmed from him wanting to discuss a community complaint, but "when he set the meeting up, there was nothing about towing in that."
"Clearly I knew that based on how it came up that it seemed to me that was the real purpose of the visit, that's what it appeared to me," Craig said Saturday, adding that the 2016 meeting was the only instance Leland inquired about the investigation.
"I'm not making any suggestion that because he inquired about the investigation that he in any way was involved in criminality," Craig said. "I've never said that. I'm just saying that because of what he asked about, and clearly he was uncomfortable, I felt the need to notify the FBI."
But Leland said he was following up on a resident's concern, which is within his role as a councilman.
"As a member of the Detroit City Council, it is my job to follow up with any constituent concern brought to my attention," Leland wrote in an email. "It is my job to resolve issues affecting my constituents and help them resolve problems they may have with the city."
Washington is another target in the FBI probe. Last week, she pleaded guilty to accepting a $3,000 cash bribe from Fiore in exchange for her helping him get a better position on the city's towing rotation. She claims she never helped him, but took the money thinking it was a loan.
Dating and politics
Leland, who served in the state house before being elected to City Council in 2013, told the Free Press last week that he was unaware of the FBI probe. He stated that "most of my colleagues were aware that I was dating Jennifer" and said there was nothing improper about his votes.
"Any vote that I make on any issue is based on the recommendation of the Administration, Legislative Policy Division, Purchasing, and the Police Department. As I recall, all of the contracts, the extensions and amendments were non-controversial at the time, and fully vetted by the Police Department. I believe the votes at the council table were unanimous and later approved by the Financial Review Commission."
The city's charter states that council members are required to disclose any financial interest, direct or indirect, that "he or she or an immediate family member has in any contract or matter pending before city council." The disclosures are required to be made in writing via a sworn, notarized affidavit, according to the charter.
Since Leland wasn't married to Fiore, it's unclear if he technically violated the city's charter.
Wayne State University law professor Peter Henning, a former federal prosecutor who has closely followed public corruption cases in Metro Detroit, said Leland should have recused himself from the votes involving his girlfriend's companies.
"It might not be a crime, but it could well be an ethics violation," Henning said.
Henning said if Leland's relationship with Jennifer Fiore involved just a few casual dates, then abstaining from votes may not have been necessary.
"If it was a continuing relationship, then absolutely -- that's an even more apparent conflict of interest," Henning said. "If you have any indication that this is a company that is going to receive a benefit -- then absolutely you have to ensure that there is no conflict of interest."
He stressed: "The easiest way to handle that is to disclose it."
It is not known how many City Council members were aware of Leland's relationship with Jennifer Fiore. Most did not return calls or emails for comment.
Henning said when it comes to elected officials spending tax dollars, they have to make sure that there is no appearance of impropriety on their part.
"Even if it was a good contract and the best one available -- for public confidence purposes, you have to be able to make sure there is no question of impropriety," Henning said. "Elected officials are held to a much stricter standard. Even if it’s not written into the rules, this is the standard the public expects."
Henning added that Leland should have abstained from the votes "especially after what we saw a few years ago, with the former mayor."
Henning was referring to the corruption trial of ex-Mayor Kwame Kilpatrick, who is serving 28 years in federal prison for — among other things — steering lucrative contracts to his contractor friend Bobby Ferguson, who received 21 years for corruption crimes.
Wire tapping nets evidence
In court documents, the FBI described Fiore as an aggressive businessman who "had a reputation for bending the rules, creating multiple companies in order to get around the (towing) rotation that is in place." The rotation list is supposed to divide the work among Detroit towers, many of whom complained that Fiore avoided the rules by creating companies in others' names and got a greater bulk of the work, the FBI says.
According to a now-sealed FBI document, Fiore talked with his family members about the rotation list, how to get on it, and was obsessed with knowing all the inside details about the towing industry, who was getting what, and who was being investigated.
Leland, the FBI wrote, was one of his helpers who kept him in the loop.
As an agent wrote in one document, "it appears that Chief Craig briefed Gabe Leland about the towing case, and Leland has briefed the Fiore family about it."
Specifically, wiretap evidence shows that the Fiore family learned about the so-called "Mars Investigation" from Leland. Mars is a Detroit towing company.
Wiretap evidence also captured Washington telling Gasper Fiore in a conversation: "So ... I guess Gabe went to talk to Chief (Craig) . .. Gabe said he mentioned about the towing and the chief said he wasn't gonna do nothing with it right now, and so there's some stuff going on."
FBI agent Bob Beeckman wrote in the affidavit: "This is a reference to the covert police corruption investigation, of which Fiore is now aware."
The Free Press asked Leland additional questions via email, including whether Fiore at any point gave him any money or if he's had any conversations with the FBI since it was revealed he had been listed as a target. Leland did not respond.
The majority of City Council members did not return calls or emails seeking comment about Leland voting on the contracts or the FBI investigation. A spokesman for Mayor Mike Duggan declined to comment on the matter as well.
Councilman Scott Benson declined to comment, stating only: “... I appreciate that this subject is of great media interest right now. However, I have no comment on this issue at present, and continue to support all of my colleagues and look forward to another four years working with Councilman Leland on behalf of the citizens of Detroit."
Council President Brenda Jones also declined to comment, saying: "Until I see something legal on it, it’s hearsay. The FBI has not approached me, or asked me any questions about Gabe Leland."
Regarding Leland's votes on Fiore business deals, Jones said she can't comment on whether he should have abstained because she doesn't know if he talked to the law department first, or vetted his decision. As for whether his votes raise ethical concerns, she said that's not her call to make.
" All of my colleagues are good colleagues," Jones said.
Detroit's Inspector General office, which investigates fraud and corruption allegations, said it does not have any open inquiries into Leland and no cases have been filed.
The office was established in 2012 as an independent agency, with subpoena powers and the ability to investigate all Detroit public servants -- including City Council members, the city clerk and mayor, as well as contractors, subcontractors, licensees and applicants for certification.
"Generally, when there are inquiries or cases being held by the FBI, we leave it to the FBI," said Deputy Inspector General Kamau Marable, Detroit's. "...Not that it doesn’t rise to that level but we have not made an inquiry. We would not duplicate any investigation."
Contact Tresa Baldas: email@example.com Follow her on Twitter @Tbaldas
Contact Katrease Stafford: firstname.lastname@example.org or 313-223-4759.
Mon Jan 08, 2018 10:11 am
|Napoleon: I’m not a target in fed probe
The Detroit News Published 10:35 p.m. ET Jan. 8, 2018 | Updated 8:18 a.m. ET Jan. 9, 2018
Wayne County Sheriff Benny Napoleon is pushing back over the idea that he has drawn federal scrutiny in a public corruption probe, saying Monday night that he’s received assurances from the federal government that he’s not a target.
Napoleon’s name, along with other Metro Detroit public officials and politicians, appeared in records filed in federal court on a list of “target subjects” in a corruption probe that has spread from Macomb County to Wayne County and Detroit. The federal wiretap documents were reported by The Detroit News in December.
"I have been in contact with the U.S. Attorney’s Office and I have been assured that I am not the target or subject of any federal corruption investigation,” Napoleon said in a statement Monday night sent by his campaign communications director, Tiffani C. Jackson.
“Any further mention, suggestion, innuendo, association or assertion, etc., of my name connected to such investigation by the media, would be totally false."
The FBI was investigating crimes in connection with Detroit towing mogul Gasper Fiore or others. The “target subjects” document was revealed in court records obtained by The News.
Napoleon, a former Detroit police chief and sheriff since 2009, said in December that he was unaware he had been named in the filing, which had been temporarily unsealed in federal court. Of the public officials listed, only former Detroit deputy police chief Celia Washington has been charged with a crime in connection with the investigation.
The ongoing corruption investigation has led to 13 convictions so far. The court filings were temporarily unsealed days after Fiore struck a plea deal with prosecutors, admitting he bribed former Clinton Township Trustee Dean Reynolds.
The U.S. Attorney’s Office did not immediately respond to a request for comment on Napoleon’s statement.
Tue Jan 09, 2018 12:48 pm
|Rizzo tried to tamper with witness, feds say
Robert Snell, The Detroit News Published 6:20 p.m. ET Jan. 9, 2018 | Updated 10:22 a.m. ET Jan. 10, 2018
Detroit — Federal prosecutors want to haul trash titan Chuck Rizzo to prison immediately, saying he tried to tamper with a government witness during a chance encounter at a Detroit casino Christmas party.
A federal court filing late Tuesday chronicles an odd series of events that brought together a key figure in the Macomb County corruption scandal and a witness who helped the FBI secure Rizzo’s conviction.
The Dec. 16 encounter at MGM Grand Casino happened while Rizzo was free on bond and awaiting a March 13 sentencing that could send him to prison for 10 years. Rizzo, 47, of Bloomfield Hills pleaded guilty in November, admitting he bribed Macomb County politicians and stole money from his trash-hauling company while building Rizzo Environmental Services into a regional powerhouse.
Rizzo owns another company that was holding a Christmas party at the casino Dec. 16. That’s the same night a key government witness and his wife arrived at the casino to eat dinner and watch a sporting event.
The night ended with Rizzo violating bond conditions by contacting the witness at AXIS Lounge, prosecutors allege.
“Rizzo attempted to intimidate, retaliate against, and tamper with a witness for the government, a witness whose statements are likely to figure in heavily at the defendant’s impending sentencing,” federal prosecutors wrote in a filing Tuesday.
Rizzo’s lawyer could not be reached for comment late Tuesday.
The filing marked a new breakdown between the government and the once-powerful CEO of Rizzo Environmental Services.
The court filing describes a tumultuous legal odyssey for the former trash company executive, who went from star witness for the FBI to a target after he stopped cooperating with investigators, fired his high-powered lawyer and got indicted in May.
Prosecutors want U.S. District Judge Robert Cleland to revoke Rizzo’s bond. The judge has set an 11 a.m. hearing Thursday in Port Huron that could end with Rizzo in prison.
The witness referenced in the government filing is not identified. But prosecutors said “Witness A” arrived at the casino Dec. 16 to watch a sports event and eat dinner at TAP restaurant.
The witness was on a list of people Rizzo was barred from contacting while free on bond, according to the government.
Coincidentally, one of Rizzo’s companies was holding a Christmas party at the casino and the witness ran into an acquaintance who worked for the firm.
The witness and his wife left TAP and headed to AXIS Lounge inside the casino to avoid running into Rizzo or his father, Charles Rizzo, who also has pleaded guilty for his role in the corruption scandal.
That’s when the witness got a text message from Charles Rizzo. “I heard (you’re) here at MGM, I would love to say hi,” the text read. “Let me know where you’re at.”
The witness went to the bathroom and returned to AXIS, expecting to see Charles Rizzo.
Instead, an angry Chuck Rizzo was there, prosecutors said.
“Chuck Rizzo began by berating Witness A, stating that it was Witness A’s fault that Rizzo was going to jail for as long as he was. Rizzo then chastised Witness A for telling federal authorities that their theft scheme from (Rizzo Environmental Services) started in 2014, which put the total of the stolen money over $500,000.”
The filing provides new details about the roots of the Rizzo investigation.
FBI agents approached Rizzo in January 2016 following a lengthy corruption investigation.
Rizzo agreed to cooperate and stop committing crimes, specifically to stop scheming with others, including the witness, to embezzle from the trash company, according to the filing.
By November 2016, Rizzo had stopped cooperating. Meanwhile, the witness told investigators that Rizzo had continued to steal money while cooperating with the government, according to the filing.
“The information provided by Witness A was crucial to the government in discovering Rizzo’s criminal conduct while he purported to be cooperating with the government,” prosecutors wrote.
In early 2016, Rizzo told the witness not to discuss the theft scheme over the telephone, according to the government.
“This was an apparent effort by Rizzo to obstruct justice by seeking to prevent the government from learning about the continuation of the theft scheme over consensually monitored telephone calls while Rizzo’s cooperation with the government was ongoing,” prosecutors wrote. “In addition, the reopened investigation of Rizzo revealed multiple additional theft schemes perpetrated by Rizzo and others prior to Rizzo’s cooperation.”
Rizzo was indicted in May and released on bond after agreeing not to contact certain people, including the witness.
“Can you agree to those conditions?” U.S. Magistrate Judge Anthony Patti asked Rizzo.
“Yes, your honor,” Rizzo said.
“Okay, and you will promise me that you will obey them?” the judge asked.
“Yes, your honor,” Rizzo said.
He broke that promise within months, prosecutors said.
After running into the witness at MGM Grand Casino last month, Rizzo tried to get the witness to lie about cash generated by the embezzlement — a ploy designed to get a more lenient sentence, according to the filing.
The witness refused and talked to FBI agents after the casino encounter.
Rizzo also said the witness needed to meet with the trash titan’s lawyers, presumably to sign an affidavit that could help Rizzo win a lenient sentence, according to the filing.
“Witness A had previously declined repeated offers to meet with Rizzo’s attorneys because he did not feel comfortable doing so,” prosecutors wrote.
FBI agents interviewed the witness Jan. 3 and the government reported Rizzo’s bond violation the same day.
Prosecutors said Rizzo likely violated a federal law making it a felony to try to intimidate or tamper with witnesses, according to the filing.
Prosecutors called the witness key to helping uncover Rizzo’s embezzlement at a time when he claimed to have stopped all criminal activity.
“Rizzo is well aware that the government’s discovery of criminal conduct during his cooperation played a role in significantly increasing the prison time that Rizzo now faces at sentencing,” prosecutors wrote. “... Rizzo obviously blames Witness A for the longer prison sentence that Rizzo now faces.”
Rizzo cannot be trusted to comply with bond conditions, the prosecutors wrote.
“The government is concerned that Rizzo will seek to contact, either directly or indirectly, additional witnesses in a desperate attempt to reduce his sentencing exposure,” prosecutors wrote.
The incident with the witness could lead to a longer prison sentence for Rizzo.
Under terms of his plea deal, prosecutors agreed to seek a sentence of about six years if Rizzo provided significant help to the government.
Now, prosecutors could ask the judge to enhance the prison sentence, arguing Rizzo tried to obstruct justice, said Peter Henning, a Wayne State University law professor and former federal prosecutor.
An obstruction enhancement could bring another 18 months in prison, he said.
“If they can yank his bail, have him thrown in prison now and then seek that enhancement, they would be coming down pretty hard on him,” Henning said. “He was truly rolling the dice and probably should not have gone to the casino that night.”
Wed Jan 10, 2018 5:24 pm
|Rizzo remains free as team portrays witness as a drunk
Robert Snell, The Detroit News Published 7:42 a.m. ET Jan. 11, 2018
Port Huron — Trash mogul Chuck Rizzo remained free on bond Thursday after a federal judge postponed deciding whether a central figure in the Macomb County corruption scandal tried to tamper with a government witness.
U.S. District Judge Robert Cleland wants to hear testimony from Rizzo’s bag man, Quintin Ramanauskas, who was unmasked Thursday as the witness involved in a chance encounter last month with Rizzo at a Detroit casino Christmas party that threatens to deepen the trash mogul’s legal problems.
Ramanauskas, 54, of Shelby Township is among 19 people charged in the widening corruption scandal that started in Macomb County and spread to Detroit. He is awaiting a prison sentence after striking a plea deal with prosecutors in July, admitting he helped Rizzo bribe public officials to secure or maintain multimillion dollar garbage-hauling contracts for Rizzo Environmental Services.
During a hearing Thursday, Rizzo’s lawyer portrayed Ramanauskas as a corrupt alcoholic who appeared drunk during the casino encounter and who has incentive to lie about whether Rizzo tried to intimidate and influence him. Ramanauskas is cooperating with the FBI and helped the government secure a conviction against Rizzo, a fact prosecutors said made the trash mogul berate Ramanauskas at the casino.
“The question is: who do you believe?” Rizzo lawyer David Debold asked the judge.
Prosecutors want Rizzo jailed immediately for violating bond conditions by meeting with Ramanauskas at MGM Grand Casino last month. Rizzo is free on bond after pleading guilty for his role in the scandal and is barred from having any contact with a list of witnesses that includes Ramanauskas.
Rizzo met with Ramanauskas after receiving assurances from one of his defense lawyers that a meeting would not violate bond conditions and endanger his freedom, Debold said.
It is the latest legal problem for Rizzo, who went from star witness for the FBI to a target after he stopped cooperating with investigators, fired his high-powered lawyer and got indicted in May.
“Here, we have a repeat obstructor of justice who was given opportunity after opportunity and each time decided not to keep his promise to the FBI and the court,” Assistant U.S. Attorney Michael Bullotta told the judge.
The Dec. 16 encounter at MGM Grand Casino happened while Rizzo was free on bond and awaiting a March 13 sentencing that could send him to prison for 10 years. Rizzo pleaded guilty in November, admitting he bribed Macomb County politicians and stole money from the private-equity company that owned most of his trash-hauling company while building Rizzo Environmental Services into a regional powerhouse.
Rizzo denied trying to intimidate and tamper with a government witness and reminded federal prosecutors he lived a lie while working undercover to help convict politicians in the Macomb County public corruption scandal.
Rizzo responded late Wednesday to the government’s request to revoke his bond and send him to prison immediately while awaiting a possible 10-year federal prison sentence in March for his role in the corruption scandal.
Ramanauskas, referred to in court filings as “Witness A,” is unreliable and was drinking alcohol heavily during the encounter Dec. 16 at MGM Grand Casino, Debold said. Ramanauskas ordered three rounds of drinks during two meetings with Rizzo at the casino restaurant and earlier that afternoon his wife posted Facebook photos indicating they were drinking shots at another Detroit location, the lawyer said.
“Just in the limited amount of time counsel for Mr. Rizzo has had to look into those allegations, they are not credible,” Rizzo’s lawyers wrote in a court filing. “Among other things, Witness A lied about whether he had been drinking that night — even though he spent the evening in at least two bars — and he violated his own bond conditions because he used alcohol excessively.”
FBI Special Agent Robert Beeckman admitted Thursday he did not know how many drinks Ramanauskas consumed on Dec. 16. Ramanauskas can drink alcohol while free on bond, but not excessively, the agent testified.
The hearing happened two days after federal prosecutors asked Cleland to revoke Rizzo’s bond. Prosecutors chronicled an odd series of events that brought together a key figure in the Macomb County corruption scandal and a witness who helped the FBI secure Rizzo’s conviction.
Rizzo and his father own a trucking company that was holding a Christmas party at the casino Dec. 16. That’s the same night Ramanauskas and his wife arrived at the casino to eat dinner and watch a football game.
The night ended with Rizzo violating bond conditions by contacting Ramanauskas at AXIS Lounge, prosecutors allege.
“Rizzo attempted to intimidate, retaliate against, and tamper with a witness for the government, a witness whose statements are likely to figure in heavily at the defendant’s impending sentencing,” federal prosecutors wrote in a filing Tuesday.
Not true, Rizzo’s lawyers wrote late Wednesday.
Rizzo asked Ramanauskas to agree to be interviewed by the trash mogul’s lawyer ahead of the March sentencing, according to the filing.
Rizzo did not violate bond conditions by contacting Ramanauskas, his lawyers argued.
The restriction barred Rizzo from contacting witnesses during the investigation and prosecution, his lawyers argued. Since Rizzo pleaded guilty in November, the investigation and prosecution phase was over, according to the lawyers.
“The person with whom Mr. Rizzo spoke at the MGM Grand thus was not a witness in the investigation or prosecution,” the lawyers wrote.
Prosecutors and the judge disagreed. Cleland said the prosecution was ongoing.
The judge Thursday remarked on the coincidence of what has been described as a chance encounter between Rizzo and Ramanauskas at the Detroit casino.
“A series of remarkable coincidences, it would seem,” Cleland said.
In the Wednesday court filing, Rizzo’s new lawyers reminded prosecutors that the trash mogul’s initial cooperation was “extensive and extraordinary.”
“Between January and October 2016 (when the government’s investigation became public), Mr. Rizzo made consensual phone calls, wore wires during undercover meetings with corrupt politicians, made introductions so that undercover FBI agents could further infiltrate the corruption, and made himself available on demand to the FBI — for hours on end,” Rizzo’s lawyers wrote. “The government well knew that Mr. Rizzo had been involved in embezzling money from his employer, and the government also knew that the genesis of that conduct was an ill-advised effort by Mr. Rizzo to reimburse himself for using his own money to fund political action committees, as requested by his employer.”
Rizzo’s undercover cooperation created an unusual predicament, his lawyers wrote.
“The government needed Mr. Rizzo to live a lie so as to keep his cover from being blown,” Rizzo’s lawyers wrote. “He could not tell anyone about his months as an undercover cooperator — not even his wife. He also needed to find a way to stop the embezzlement in which Witness A and others had participated without telling them why it must stop. He wasn’t perfect in carrying that out, but he did protect his cover and managed to pay back all that he had taken.”
Fri Jan 12, 2018 2:00 pm
|15th man cuts deal in Macomb County corruption case after feds bug his phone
Tresa Baldas, Detroit Free Press Published 8:17 p.m. ET Jan. 11, 2018
The federal government Thursday secured its 15th guilty plea in a wide-sweeping corruption probe that started in Macomb County, stretched into Detroit and Lansing and took down a garbage empire.
The latest defendant to cut a deal is Sterling Heights businessman Robert Maechtle, a manager at Motor City Electric whose phone was tapped by the FBI three years ago, according to sealed court records obtained by the Free Press. He pleaded guilty to bribery Thursday, admitting he handed off a $2,000 bribe to a Washington Township official in 2014 in order to secure a contract for his company.
A month after Maechtle paid the bribe, the FBI secured a wiretap on his cell phone, according to court records, though another three years would pass before Maechtle was charged.
The bribed official was the late Steven Hohensee, the superintendent of public works for the township who was also charged, but died of natural causes amid the probe.
Maechtle faces 18-24 months in prison under the terms of his plea deal.
According to his plea agreement, Maechtle agreed with at least two other people, including engineers Paulin Modi and James Pistilli, to pay a $2,000 bribe to Hohensee to secure the contract. The bribe was paid on Oct. 20, 2014, at a Shelby Township restaurant, where Maechtle "handed Hohensee an envelope containing $2,000 in new $100 bills," the plea deal reads.
Modi and Pistilli were also charged and have cut deals. They are among 19 people charged so far in a probe that took down the Rizzo garbage company and landed garbage tycoon Chuck Rizzo Jr. and towing titan Gasper Fiore in federal court.
Both Rizzo and Fiore were charged with paying bribes to win contracts. Both have cut deals and are awaiting sentencing.
Tresa Baldas can be reached at email@example.com. Follow her on Twitter @Tbaldas.
Fri Jan 12, 2018 2:06 pm
|Home News Government contracts
Debated refuse contract awarded in Sterling Heights to Rizzo Environmental Services
After months of discussion and debate, the Sterling Heights City Council on April 5 voted unanimously to award the city’s refuse, recyclables and yard waste collection contract to Rizzo Environmental Services Inc. with the expectation that the move would save the city approximately $1.5 million over the next eight years.
PHOTO -- RIZZO ENVIRONMENTAL SERVICES
After months of discussion and debate, the Sterling Heights City Council on April 5 voted unanimously to award the city’s refuse, recyclables and yard waste collection contract to Rizzo Environmental Services Inc. with the expectation that the move would save the city approximately $1.5 million over the next eight years. PHOTO -- RIZZO ENVIRONMENTAL SERVICES
By Sean Delaney, firstname.lastname@example.org, @sdelaney81 on Twitter
POSTED: 04/08/16, 12:12 PM EDT | UPDATED: ON 04/08/2016 8 COMMENTS
After months of discussion and debate, the Sterling Heights City Council has awarded the city’s refuse, recyclables and yard waste collection contract to Rizzo Environmental Services Inc. with the expectation the move would save the city about $1.5 million over the next eight years.
The council voted unanimously on the contract on award April 5.
“I think we’ve debated this issue quite a bit over the past few months, but I also think that’s a good thing,” Councilman Doug Skrzyniarz said. “This is the largest contract we have in the city, so it should be something we talk a lot about. It should be something that’s debated and thoroughly vetted, and that’s what’s been done throughout this process.”
According to Public Works Director Michael Moore, the city’s current contract with Waste Management of Michigan Inc. expires April 30.
“In anticipation of this contract termination date, the City Council authorized the preparation and issuance of an invitation to bid on Nov. 4, 2015, to include specifications for an award of a new, five-year contract under three service level options,” Moore said.
In February, the council rejected all bids received. Following the rejection, the City Council authorized the preparation and issuance of a Request for Proposals for refuse, recycling and yard waste collection.
“The goals of the RFP were to reduce the costs obtained through the invitation to bid for base refuse services, as well as expand curbside recycling options,” Moore said.
A pre-proposal meeting for interested vendors was conducted on March 9 and three proposals –- as well as a “no bid” response –- were received on March 17.
All three of the vendors –- Emterra Environmental USA Corp., Rizzo Environmental Services Inc., and Waste Management of Michigan Inc. –- were granted an interview by the city’s Evaluation Committee, which is comprised of Moore, City Development Director Denice Gerstenberg, and Finance & Budget Director Brian Baker.
According to Moore, the proposals were independently evaluated based upon qualifications/experience, capacity, methodology, references and cost.
“At the conclusion of the interviews and initial evaluation of the proposals on the aforementioned criteria, the Evaluation Committee proceeded to negotiate potential options with Rizzo Environmental Services and Waste Management,” Moore said. “The Evaluation Committee concluded that the three options proposed by Rizzo Environmental Services provided the best combination of scope of services and favorable cost.”
The three options proposed by Rizzo Environmental Services include:
• Option No. 1: Base refuse and seasonal yard waste collection and disposal services with an enhanced subscription-based curbside recycling program. According to Moore, Option No. 1 reflects the level of service currently being provided throughout the community for refuse, yard waste and recycling on an enhanced subscription basis. The enhancements include a reduction in the annual recycling subscription from $67 to $57 per year, as well as a shift from bi-weekly to weekly recycling. The three recycling centers operated by the city would remain open, Moore said. Option No. 1 is the lowest cost option to the city at $4.4 million per year.
• Option No. 2: Base refuse and seasonal yard waste collection and disposal services, with a full service weekly curbside recycling program, including a wheeled cart or bin at no charge to the resident. According to Moore, Option No. 2 includes the current level of service for refuse and seasonal yard waste collection and disposal and provides a voluntary weekly curbside recycling service along with a wheeled recycling cart or 18-gallon bin at no cost to the resident.
“The city’s cost for this full service curbside recycling program is capped at the 40 percent participation level, a level the city fully anticipates will be achieved given the participation rates of comparable local communities and having no option to utilize the three recycling centers since they would be closed with this option,” Moore said. Option No. 2 is the highest cost option to the city at $5.2 million per year.
• Option No. 3: Base refuse and seasonal yard waste collection and disposal services, with a full service weekly curbside recycling program, including provision and use of a free 18-gallon recycling bin. According to Moore, Option No. 3 provides the current level of service for refuse and seasonal yard waste collection and disposal. It differs from Option No. 2 in that residents who wish to participate in the voluntary curbside recycling program will have the option to use a “free” 18-gallon recycling bin or pay for a wheeled recycling cart at $45 for a 35-gallon cart or $65 for a 64-gallon cart. The city’s three recycling centers would close under this option, which would cost approximately $4.8 million per year.
“All three options provide an opportunity for residents to purchase wheeled refuse and/or yard waste carts (at a cost of) $75 for a 64-gallon wheeled cart, and $85 for a 96-gallon wheeled cart,” Moore said.
After careful consideration, city administration recommended acceptance of the proposal by Rizzo Environmental Services under Option No. 1 as the lowest cost option.
“Rizzo Environmental Services’ offer to apply a 2 percent annual reduction on all services, with the acceptance of an eight-year contract term, equates to a savings of $800,000 over the term of the contract,” Moore said. “Additionally, Rizzo Environmental Services is not taking advantage of the fuel adjustment clause, thereby absorbing all future fuel increases.”
According to city officials, Rizzo Environmental Services’ proposal is 5.9 percent less than Waste Management’s proposal over the proposed eight-year term, or approximately $247,890 per year.
“We started this process in October with one goal in mind,” Councilman Nate Shannon said. “That goal was to see if we could possibly save money on the refuse contract. I’m happy to report that these efforts worked. The amount of money we saved is substantial. I know an eight-year contract is somewhat unusual, but I assure you if Rizzo does not adhere to the contract that we will find them in breach of contract, and that means we will not continue with them if they do not do what we’ve asked them to do. I think it would be hard to argue that this process was not the right decision and I’m very happy with the results.”
While the vote to award the contract to Rizzo Environmental Services was unanimous, several residents spoke out against it at the April 5 meeting, noting that the process seemed “out of the ordinary” when compared to how the city handled similar issues in the past.
“I have a problem with the way this whole bid thing was handled,” resident Jeff Norgrove said. “It was very sloppy. This is not the way residents are used to. I’ve never heard of an eight-year contract in this city. With what people have witnessed over the past couple months, it looks very bad.”
Council members Barbara Ziarko and Maria Schmidt also expressed reservations about the process.
“(This process) isn’t the way we’ve done it in the past,” Schmidt said. “Hopefully we don’t have to do it like this again. I have concerns with an eight-year contract. We’ve never done it. I understand that in order to get the savings we would have to commit to Rizzo for eight years, but it would be my hope that they would consider a five-year contract with extensions. That would give me and many residents much more peace of mind.”
Mayor Michael Taylor defended the process.
“I’m not sure what we could’ve done differently,” he said.
“The bid was put out in October, and there were members of the council that wanted to wait even longer than that,” he said. “We are now less than 30 days away from the expiration of the current contract. Had we waited any longer, I don’t know where we would be. We would not have been able to award this contract as we are tonight. We would’ve been stuck doing something else that certainly would’ve cost more money. There’s just no way to get around it.”
Taylor argued that the process of selecting a new vendor, while controversial at times, would ultimately result in cost savings for the city and its residents.
“So I’m not going to apologize for a process that ended up saving money every step of the way,” Taylor said. “The reason the process seemed to be dragging on and seemed to be contentious is because every time we tried to go out for bid, every time we tried to put this out, and every time we tried to give information about what was going to happen, it was met with misinformation.
“The process, to me, worked perfectly,” he added. “It provided an opportunity to get exactly what the city and the residents want at the best possible price. I don’t see how anyone could be upset with that.”
The term of the new contract will be May 1, 2016, through April 30, 2024, with full service weekly curbside recycling collection and disposal service utilizing an 18-gallon bin starting no later than May 1, 2018, and continuing to April 30, 2024.
Fri Jan 19, 2018 11:20 am
© 2018 by Downtown Publications, Inc.
Birmingham, Michigan 48009
Battle for trash hauling
December 1, 2016
What was once a small snow plowing company, with only the city of Hamtramck as a major customer, is now the dominant waste hauler in southeastern Michigan, with contracts for hauling trash and recycling for 55 municipalities, including 20 out of 62 communities in Oakland County. This growth by Rizzo Environmental Services has come at the expense of other waste haulers, and is now the subject of a public corruption probe by the FBI in Macomb County. While there currently is no known evidence of corruption by Rizzo in Oakland County, there has been a battle for supremacy and dominance in the county, and if numbers tell the story, that story says that Rizzo is currently the reigning king of trash hauling, a multi-million, if not billion dollar, industry.
The battle for garbage disposal in Oakland County may seem like a strange war, but it's actually a classic conflict, a blazing battle over territory, money and power.
The dirt on Rizzo, and how they became the king of the trash heap, may not be as salacious as what has happened in Macomb County. From research so far relative to Oakland County, it appears the company has a reputation for providing their customers with very good service at a very good price, often underbidding their competition. As for possible improprieties in Oakland County, or if the FBI is investigating any corruption in the county, Tim Wyley, FBI public affairs spokesperson said, “I would be able to neither confirm nor deny if we are looking into Rizzo in Oakland County. I have nothing I can share with you regarding any of our investigations with Rizzo or Oakland County.”
Rizzo Environmental Services is in the process of being rebranded as GFL after a sale on October 3 to GFL Environmental (Greener for Life), a company valued at $2.4 billion out of Toronto, Canada, which operates in all of Canada's provinces. Rizzo was a family-owned business for over 50 years, since 1965, out of Sterling Heights. Early on, it was known as C&R Maintenance Inc., providing waste control services to home and business customers in metro Detroit, renting roll-off dumpsters, front-load containers and compactors of various sizes for home and commercial use, as well as landscaping and snow removal for some customers. The company also handled all forms of recycling. By 2012, the company was known as Rizzo Services.
C&R Maintenance initially was a commercial maintenance company begun by Chuck Rizzo Sr. in 1965. Over the years, the company grew, operating Snowone, a snow removal company that is now defunct; Rizzo; Rizzo Services; Rizzo Express, a waste management service; and Titan National, a national vehicle shipping company. Rizzo Express and Titan National are both no longer operational businesses. Over time, Chuck Rizzo Jr. joined his father in the business, and was CEO and president of the company when it was sold recently to GFL. According to numerous published reports, at least three Macomb Township officials are charged with taking bribes from Rizzo Environmental Services in exchange for helping the trash hauling company win a contract. The FBI has announced they are conducting a full public corruption probe of “pay-to-play” schemes and charging the politicians behind them in Macomb County, stating, “this is an extensive investigation into systemic corruption.” In light of that news, Chuck Rizzo Jr. resigned, as of October 25, from the company he and his father created.
According to published reports, Rizzo Environmental Services is cooperating with the government after getting caught allegedly paying bribes to Macomb County trustee Dean Reynolds who was charged with selling his vote, for $75,000 in cash and a free lawyer in his divorce, in exchange for pushing through an $18 million deal with Rizzo Environmental Services. Macomb County trustee Clifford Freitas was also charged with accepting a cash bribe, of $7,500, for providing the company with”sensitive bidding information” to help Rizzo win a contract in 2015. According to a criminal complaint, Freitas also accepted a $35,000 bribe from the company to make sure that Macomb Township residents would be billed for garbage services on their water bills in order to save money for Rizzo Environmental Services.
Frietas and Reynolds have declined comment.
When called for comment on this story, on how Rizzo grew to become the dominant waste hauler of Oakland County, Chuck Rizzo Jr., hung up the phone on Downtown newsmagazine.
GFL Environmental Inc. President and CEO Patrick Dovigi made the announcement, “In the best interests of the company and our customers, Chuck Rizzo Jr. has resigned, effective immediately. I will oversee Rizzo's business on an interim basis until further notice.”
Dovigi also announced that he was immediately having Rizzo's signature red trucks repainted green and the Rizzo logo replaced with GFL. While he said that was in the plans when he purchased the company, he was moving it up quicker, given what had transpired.
Dovigi and GFL, which owns waste hauling companies in every province of Canada except Prince Edward Island, purchased Rizzo from Kinderhook Industries, a private equity firm that acquired Rizzo in 2012, allowing it to expand. Rizzo was GFL's first U.S. acquisition.
At that time, Rizzo Services, it's name at the time, provided collection services in 16 municipalities throughout southeast Michigan. At the time of its acquisition, Kinderhook stated that Rizzo represented the eleventh environmental services transaction they had completed in the previous four years. They did not reveal financial terms of the transaction.
At the time of its investment, Kinderhook managing director Rob Michalik said, “Rizzo has had extraordinary growth due to its loyal customer base, market leading service and exceptional management team led by Chuck Rizzo Jr. who has 25 years of waste industry knowledge.”
“The recapitalization of Rizzo by Kinderhook will enable the company to continue to expand its service footprint throughout southeast Michigan. Our partnership with Kinderhook will enable us to further grow our platform and expand our current service offerings,” Chuck Rizzo Jr. said on September 13, 2012, after its acquisition.
Growing the platform and expanding service offerings is precisely what Rizzo did over the past four years, going from the provider of waste management services to 16 communities in 2012 to 55 in 2016. Included in those numbers are 20 in Oakland County, many of which are relatively new contracts. Communities now with Rizzo under contract include Bloomfield Township, Bloomfield Hills, Fenton, Franklin, Highland Township, Keego Harbor, Lake Orion, Madison Heights, Milford Township, Milford Village, Orchard Lake, Rochester, Rochester Hills, S. Lyon, Royal Oak, Southfield, Sylvan Lake, Walled Lake and West Bloomfield.
Southfield, Franklin and Walled Lake all have contracts which began in the last few months; several other municipalities awarded Rizzo their waste management contract within the last couple of years.
The most significant new contract Rizzo acquired in the last four years is for portions of the city of Detroit, which the company received in 2013, from the city's emergency manager, under a five-year contract. It shares services for the city with Advanced Disposal.
As Rizzo expanded its tentacles throughout Oakland County, other hauling companies lost their contracts. Many came at the expense of Waste Management, a Houston, Texas-based recycling and waste management company that alleges it is North America's leading provider of integrated solid waste services. Currently, Waste Management has a contract with four Oakland County municipalities: Farmington, Farmington Hills, the city of Novi and Northville. The firm previously also had contracts with Bloomfield Township, Franklin, Madison Heights, Royal Oak and Southfield in Oakland County, along with eight communities in Macomb County, and another eight in Wayne County, all of which have switched to Rizzo.
“A decade ago, Waste Management served approximately 45 communities in the tri-county area. Twenty-one of those contracts are now being serviced by Rizzo Environmental. In some instances, bid processes we've certainly not seen before, like allowing bids to be revised and resubmitted, were observed,” said Tom Horton, spokesperson for Waste Management. “We won’t speculate on factors that have helped them win bids. But Waste Management continues to have a major footprint in and commitment to southeast Michigan and across the state, with more than 500 trucks daily collecting solid waste on behalf of our highly valued customers. We will continue to watch as the recently announced investigation unfolds.”
“We have a five-year contract (with Waste Management) that is set to expire on June 1, 2017. It was extended once. Sometime between now and then, we will be choosing a new contractor. It may be Waste Management, or we may choose to bid it out,” said Jim Gallogly, director of the department of public works for Northville.
“It's been forever” that Farmington has had a contract with Waste Management, said department of public works director Charles Eudy said. “I've been here 22 years, and they've had it for at least that long.”
Many of the municipalities have five, eight, even 10-year contracts with Rizzo, including Rochester, which first signed a contract with Rizzo in 2010, followed by a contract extension through 2017. An official in S. Lyon said the community had a 10-year contract with Duncan, which was acquired by Rizzo.
Why tie up their municipalities with such lengthy periods of time? One official explained that this is the Rizzo business model, which has helped them grow their enterprise and their dominance.
“A contract with eight years left is more valuable than one with two years left,” the official said, who did not want to be identified. “It is considerably more valuable to finance, and you can approach banks to loan you more money for trucks and equipment. Who would give you a contract for eight years with all of the fluctuations of gas and other variables? But if you have to ramp yourself up in order to grow, you need someone to loan to you so you can borrow to get more equipment, so you need those long-term contracts. They're good for the municipality, and they're good for the company,” he explained. “If they have to eat a little bit of each contract, the valuation of the company is still growing. The goal is to sell the company, and the company is way more valuable if they have more contracts. And they have just resold the company.”
He said that between the first hedge fund, Kinderhook, which provided a huge infusion of capital to allow Rizzo to grow, and the purchase by GFL, Rizzo's valuation had increased by 50 percent, “so the second (buyer) paid much more for (the company). There's a tremendous amount of revenue coming out, and the second buyer was willing to pay more. That's why Rizzo is willing to be the low bidder, even fix their contracts. They just understand the system, and there's nothing wrong with that.”
Waste Management, however, beat out Rizzo Environmental for a new contract with the city of Novi which began July 1, 2016, said Mike Csapo, general manager of Resource Recovery and Recycling Authority of Southeast Michigan (RRRASOC), a municipal solid waste provider to nine communities, negotiating contracts on behalf of Southfield, S. Lyon, Farmington, Farmington Hills, Novi, Walled Lake, Wixom, the Village of Milford and Milford Township. Csapo explained that RRRASOC helps their member cities deploy solid waste contracts for their communities. “Because we contract jointly for all events with a private service contractor, we get very good prices versus a small community for one event.”
He said the consortium helps the community determine if they are getting good service, are they getting good pricing, have they bid out the contract previously, and are there comparable communities which have bid their contract out recently that can be used as a comparison.
Southeastern Oakland County Resource Recovery Authority (SOCCRA) is another municipal grouping which negotiates contracts for its 12 member communities, which includes Berkley, Beverly Hills, Birmingham, Clawson, Ferndale, Hazel Park, Huntington Woods, Lathrup Village, Oak Park, Pleasant Ridge, Royal Oak and Troy. Jeff McKean, general manager of SOCCRA, said, “We keep an eye on services and prices on each community. We did a very extensive RFP (request for proposal) process for all the communities, and two went with Rizzo – Royal Oak and Hazel Park. Car Trucking has had long contracts with Birmingham, Beverly Hills and Ferndale; the others went with Tringali (Sanitation) for a 10-year contract, from July 1- June 30, 2017.”
McKean said SOCCRA made the decision to extend the contract with Car Trucking for Birmingham, Beverly Hills and Ferndale for another 10 years, until June 30, 2027; Tringali's contract with Berkley, Clawson, Huntington Woods, Lathrup Village, Oak Park, Pleasant Ridge and Troy was also extended through June 30, 2027. He said they decided to extend the contracts, without going out to bid once again, because “we have very good contractors that provide very good services. For our communities, service is more important than price.
“We also did a market survey of all the prices being charged in southeastern Michigan, and our prices are very competitive, so we thought there was no need to do a bid process,” McKean continued. “There's been no pushback from any of our communities.”
Royal Oak has had a contract for the last 9.5 years with Rizzo, Greg Rassel, director of public service said. “The contract was for 10 years,” Rassel said, noting the 10 years is up July 1, 2017. He said SOCCRA is negotiating a contract extension for Royal Oak through 2027.
McKean said that Hazel Park, which has had Tringali as a contractor for many years, indicated they wanted to switch contracts, and they are switching to Rizzo through 2027.
A representative from Tringali declined to comment for this article, citing a fear of reprisals.
RRRASOC's Csapo, which helped both Novi and Southfield bid out contracts this past spring, with Southfield choosing Rizzo and Novi selecting Waste Management, said they both went through a similar bid process. The city of Southfield chose Rizzo for an eight-year contract with a five-year renewal contract available, with their contract going into effect July 1, as a result of a comparative bid. “It was managed by the city's purchasing department, with our assistance and evaluation,” Csapo said. He said the bids were reviewed by Southfield's administration, then by their finance committee, and finally by the Southfield City Council in a study session, ultimately winning approval from city council in an open meeting.
Just the opposite, the city of Novi chose Waste Management when they went through a similar process, Csapo said, after having had a subscription process, where each homeowner or subdivision privately contracted with individual waste hauling contractors. Novi followed a very lengthy process where they also looked at services and prices in several communities, developed an RFP with the help of RRRASOC, then went through an administrative review, a consultant review committee, and then city council, where they awarded a five-year contract with a three-year contract extension available, to Waste Management, effective July 1, 2016.
“Private contracting is more commonly done in rural townships. The data shows that when you have a subscription process, you pay higher prices. It's simple math. There's the economies of scale and service densities that allows for better pricing, and it provides for less trucks on the roads, and more control of the level of services, as well as trash gets set out at the street less frequently,” Csapo said.
In Oakland County, several municipalities still have private contractors for their residents' trash collection. Many are in northern and western Oakland Country, from Brandon Township, Clarkston, Groveland Township, Holly Township, Independence Township, Lake Angelus, Lyon Township, Oakland Township, Orion Township, Ortonville, Oxford Township, Southfield Township and Springfield Township. There are also a smattering of other companies operating in Oakland County, with contracts for one, two or three municipalities.
Csapo sees the growth of Rizzo as “one of being able to meet or exceed the level of other contractors. We called around to other Rizzo customers (when doing Southfield's bids) to check and evaluate their level of service. Invariably, it was very good. That's always the number one concern. Service is the primary concern – besides price. Will the service be of the caliber that residents deserve? When you call around to existing communities and they say it's been very good, that's what matters. Then, with price – with a competitive bidding price, in one case – Southfield – they were the low bidder; in another – Novi – Waste Management was the clear low bidder.
“Just being subjective to the marketplace, you look at price and performance,” Csapo continued. “It appears in many of the competitive bids, Rizzo has been the consistent low bidder while providing good service.
Numerous communities cite their satisfaction with Rizzo's service. “Our experience is that they provide very good service at very good rates,” said SOCCRA's McKean. “We find service is very important to customers – 'We don't just want our garbage gone; we want it done properly.' We find many people have very good experiences with Rizzo. We hear many stories like that.”
Jerry McCallum, director of city services for Orchard Lake Village, said they had had an original contract with Republic that ended in 2015, and signed a five-year contract with Rizzo, beginning that year. “We went out to bid, and their (Rizzo) prices – you couldn't beat them. Every community says the same thing. Republic came to us and said they would keep their prices the same, and we said, no, we have to bid our contracts out,” McCallum said. “You're getting a very good service for a very competitive price. Why wouldn't we want to save our community money? With a five-year contract, I imagine we will bid it out once again because being fiscally responsible, our council tends to bid out large contracts.”
Bloomfield Township first signed an eight-year contract with Rizzo in 2007 after an advertised open bid, where six companies bid on the business. Supervisor Leo Savoie said the township board unanimously approved the contract with Rizzo because it came in lowest. “At the time, staff reviewed a number of competitive bids in neighboring communities as well, and did comparative bids, and felt that reviews of service were excellent, so we went with them.”
In November 2014, the township board extended the contract for another eight years, through 2023, as Rizzo said prices would remain flat if there was no bid of the contract. Only trustee Brian Kepes voted against the contract extension, as he wanted the contract to go out to bid. No one has been dissatisfied with the service, Savoie said.
“I voted against it because I thought it was the appropriate thing” to bid the work out, Kepes said.
SOCCRA's McKean said, “I've been surprised at how successful they've been. You typically don't see one company dominating like that, and they've been dominating for the last five years.”
Across the country, it's not unusual for one trash hauler to become dominant in a region, although it can vary from region to region, said Chris Dougherty, spokesperson for the National Waste and Recycling Association.
“There are more than 10,000 communities that have waste service contracts. It's a very competitive industry, and there is no one trend to point to. Every community, every region, does it differently,” Dougherty said. “It is not uncommon for one company to get momentum and accumulate contracts. But everything just varies by region. Some companies are very vertically integrated, having their own landfill, which they also benefit from having other waste haulers use their landfills. In any industry, vertical integration is a good thing because it leads to economies of scale.”
Rizzo dropped its plan for a landfill in 2014. It had proposed a landfill in Macomb County, as well as had options in St. Clair County and for the Clinton Valley Farms landfill in Lenox Township (Macomb). Instead, reports stated that they, along with Advanced Disposal, agreed to dispose trash at the Detroit Renewable Energy waste to energy plant in Detroit, also known as the Detroit incinerator.
An individual in the business, who requested to remain anonymous, inferred that Rizzo's growth has not been all great service at low bids. “You don't just get that big – it doesn't just happen. It's easy to figure out. It's greed when you get to 55 communities. Anywhere Rizzo is, there's any issue. You're not that lucky.”
Publicly, Rizzo has donated thousands of dollars to the campaigns of just about anyone – and everyone – running for public office in Oakland County, as has Waste Management to a lesser extent. Both donate through political action committees – PACs.
Rizzo formed its PAC in 2013, donating $5,000 to county executive L. Brooks Patterson in the last couple of years; $8,400 to county sheriff Michael Bouchard; $1,000 to Mike Gingell, chairman of the Oakland County Board of Commissioners; $250 to Oakland County commissioner Shelley Taub (R-Birmingham, Bloomfield Hills, Bloomfield Township); $5,000 to state Sen. Majority Floor Leader Mike Kowall (R-White Lake) and $550 to his wife Eileen, a county commissioner; $500 to state Sen. Marty Knollenberg (Troy, Birmingham, Rochester, Rochester Hills); as well as a largesse of donations to council members and commissioners in numerous municipalities, including Rochester Mayor Cathy Daldin, who received $250.
State Rep. Mike McCready (R-Birmingham, Bloomfield Township, Bloomfield Hills) received $1,000, and Bloomfield Township supervisor Leo Savoie and trustee Brian Kepes each received $500 from Rizzo, but all three recently donated their political contributions from Rizzo to charity to avoid any appearance of impropriety given the Macomb investigation.
While there is nothing illegal, or unusual, to see corporations donating to lawmakers, the scope of Rizzo's donations, and their pervasiveness throughout much of Oakland County, appears more aggressive than others, including Waste Management and Republic. Tringali does not have a PAC.
Appearances do not necessarily insinuate guilt. Since the recent Macomb County corruption probe, attorneys for many municipalities are examining their Rizzo contracts to see if there is any contractual implications from their acquisition by GFL, as all of the contracts have a clause stating that they do not have to be assigned to another contractor without prior written approval by the governing council. One official said that GFL is asserting that no assignment is necessary because its purchase was strictly a financial deal. But ultimately, if communities are satisfied that GFL is providing the same good service that Rizzo had, and that the communities expect, there is little likelihood contracts will be voided.
“Communities have to decide whether they're still getting very good service at a very good price, and if they would get the same service at the same price if they voided the contract and went back out to bid with another company,” the official noted.
“Since the FBI investigation of Rizzo, we've been keeping a close eye on the situation,” said SOCCRA's McKean. “So far, Rizzo hasn't been charged with any wrongdoing.”
Fri Jan 19, 2018 12:50 pm
|You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum