Dive Brief:
- Michigan-based hauler Rizzo Environmental Services is involved in a major federal corruption investigation, the Detroit Free Press reports.
- Sources told the Free Press that Rizzo is suspected of providing Clinton Township Trustee Dean Reynolds up to $75,000 in cash and the free services of a divorce attorney in exchange for favorable treatment in renewing the township's $18 million trash hauling contract. Reynolds made the motion to extend the contract and it passed in a 4-3 vote.
- The FBI arrested Reynolds on Oct. 13 as part of a larger probe by U.S. Attorney Barbara McQuade's office into "systemic" corruption throughout Macomb County. Rizzo has not been officially named or charged with any criminal wrongdoing and has said it will cooperate with authorities.
Dive Insight:
Rizzo's coverage has nearly doubled in size over the past five years due to lower prices than Waste Management, Republic Services and other local competitors. In an unrelated September interview, the company's director of government affairs Joseph Munem told Waste Dive they are "now the largest municipal waste hauler in Southeast Michigan." In light of the corruption probe, the company's bidding success and political contributions have come under greater scrutiny.
The company has been part of a contentious, multi-month contract debate in Flint that has yet to be resolved. Mayor Karen Weaver and Councilman Eric Mays, Rizzo's two main supporters in the negotiations, both said they haven't been offered any money from the company. Councilman Scott Kincaid, who supports Republic Services, told MLive that he believed the contract is being awarded to Rizzo "as a favor for people that work in [Weaver's] administration," but did not directly accuse the company of offering bribes.
Canadian company GFL Environmental Inc. acquired an equity interest in Rizzo and its subsidiaries earlier this month. The deal allows Rizzo to maintain its headquarters and offers GFL its first opportunity to expand into the U.S. through markets in Michigan and Ohio. The immediate effects of these allegations on Rizzo's business in Flint or elsewhere remains unclear. Munem provided Waste Dive with the same statement that the company has been using since the news came out last week.
"In this, as in all matters, we're cooperating with the legal authorities. We will follow their guidance so long as it may be required in the coming weeks," he wrote. "We will continue to focus on delivery of our services, and to demonstrate to our employees, partners and customers that we remain the premier provider of environmental services in our community."
