Archives of the Mayor's Press Office

FOR IMMEDIATE RELEASE
Date: December 20, 1996

Release #663-96

Contact: Colleen Roche (212) 788-2958, Jack Deacy (212) 788-2958 or Dwight Williams(212) 788-2972


MAYOR GIULIANI ANNOUNCES TRADE WASTE COMMISSION PROPOSAL TO REDUCE MAXIMUM RATES FOR COMMERCIAL GARBAGE REMOVAL BY MORE THAN 20%
Market Prices Are Dropping as Competition Increases

Mayor Rudolph W. Giuliani today announced that the New York City Trade Waste Commission has issued a proposal which would reduce the maximum rate chargeable for the removal of garbage by the private carting industry in New York City by more than by 20%. The Trade Waste Commission was established by the City Council in June of this year to help bring an end organized crime's corruption of the City's private carting industry.

"The Trade Waste Commission staff conducted an extensive study of market conditions and concluded that the current market price for waste removal in New York City not only is considerably below the Commission's proposed maximum rate, but also is continuing to drop as competition increases in the industry," Mayor Giuliani said. "The Commission's proposed maximum rates would bring the benefits of increased competition to all customers in the industry, while at the same time allowing honest, well-run firms to obtain an attractive return on their investments in the market."

The Commission is recommending that the current maximum rate charged for uncompacted waste be reduced from $14.70 to $11.74 per cubic yard and the current maximum rate charged for precompacted waste be reduced from $46.70 to $30.06 per cubic yard.

"For the past four decades, the carting industry has been controlled by a cartel dominated by organized crime that has eliminated competition from the market and maintained commercial waste removal prices at artificially high levels through price-fixing, bid-rigging, customer allocation agreements, and other illegal means," the Mayor said. "This anti-competitive scheme, enforced through extortion, murder, assault, bribery and other racketeering acts, has exacted a 'mob tax' estimated at $500 million a year from commercial establishments in New York City, who pay far more for waste removal than businesses in the nation's other major cities."

The proposed maximum rates will significantly reduce the trash bills of New York City businesses -- thereby reducing the costs of doing business in the City -- and hasten the exodus of organized crime from the waste removal business by eliminating the windfall profits it reaped through decades of anti-competitive conduct.

The Commission's work is part of an ongoing law enforcement effort against the industry cartel. In June 1995, the Manhattan District Attorney's office struck the first of several recent blows against the cartel when it obtained a 114-count indictment against four trade waste associations, 23 carting companies and 17 individuals. Since that time, several of the nation's largest waste removal companies, including Browning Ferris Industries, Inc., USA Waste Services, Inc., and WMX Technologies, Inc., have entered the New York City market for the first time. Additional state and federal indictments against local carting companies and associated individuals were handed down earlier this year. These efforts, coupled with the entry of prominent national firms into the long closed New York City market, have brought genuine competition to the industry and already have resulted in a substantial reduction in market prices during the second half of this year.

The New York City Trade Waste Commission regulates businesses in the private carting industry, handling the licensing, rate-making and investigatory authority. The Commission studies the needs of commercial enterprises and the trade waste industry in order to formulate policies for efficient garbage removal at fair prices and to establish educational programs to aid customers. In a pilot project, the Commission has also designated special trade waste removal districts where agreements are reached based on a competitive process.

The Commission members include Deputy Mayor Randy Mastro (Acting Chair), Deputy Mayor Rudy Washington, Consumer Affairs Commissioner Jose Maldonado, Investigation Commissioner Edward Kuriansky and Sanitation Commissioner John Doherty. Edward Ferguson III was recently named Executive Director of the Commission and will assume the position of Chair of the Trade Waste Commission on January 1, 1997. The commission's staff consists of 80 people detailed from the Police Department and from the following City agencies: Sanitation, Consumer Affairs, Environmental Protection, Finance, Transportation, Business Services, Investigation and Health.

A public hearing on the Commission's proposed rule will be held on January 21, 1997.



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