Benz testimony points to corruption

Rebecca Neipp

News Review Staff Writer

Witness testimony from Kern County staff and past and current employees of Benz Sanitation raises allegations of a history of corruption between the company and county officials that began even before the city of Ridgecrest became embroiled in conflict with its trash vendor.

Last week Kern County Superior Court released a redacted version of a 200-page report by the Ridgecrest Police Department regarding its investigation into potentially illegal operations at Benz. (Though many of the details have been blacked out, the News Review has been able to substantiate many of the obscured details through other county documentation and corroborating witness testimony.)

Paul Benz Sr.’s guilty plea to one felony charge of misreporting claims to Kern County seemingly concluded the years-long contention between his company and the city of Ridgecrest. (See also the brief historical summary, this page.)

Witnesses allege that Benz had been conducting business without proper documentation or authorization, and relied on the support of highly placed friends (and beneficiaries) to protect him from answering to the county. The police report outlines accusations that Benz profited at the expense of the taxpayers, and that elected leadership suppressed staff attempts to hold the company accountable.

An RPD document establishing probable cause for investigation states that the department began looking into inconsistencies between Benz and subsequent hauler Waste Management, which apparently reported a much higher diversion rate in the Ridgecrest area.

In an effort to find the reason for that discrepancy, RPD began last December to conduct surveillance of Benz trucks to track disposal operations within the company. According to the report, drivers were picking up trash from some 1,500 accounts in Los Angeles County, processing the waste through the Materials Recovery Facility in Tehachapi and dumping the residual in the Tehachapi landfill.

In March of this year RPD continued its investigation by serving warrants on Benz properties, interviewing management and staff and seizing records. In many cases staff members were reluctant to discuss operations. Many testimonies conflicted with those of others, and some witnesses — including the staffer responsible for the reporting mechanism — even contradicted themselves.

The statements of rank-and-file Benz employees indicated that most were unaware of — or unwilling to speak to — how their roles fit into the big picture. Their testimonies also revealed a nonstandard system of documentation and reporting that was based on vague estimates, assumptions and a basic lack of communication.

But based on the information they gathered, investigators were able to determine that L.A. County trash was being disposed of in Tehachapi, and that tonnage was being falsely attributed to Ridgecrest and other locations within Kern County.

“Benz Inc. has a significant fiscal incentive to fraudulently misreport the origin and classification [of waste] they collected,” states the probable-cause declaration.

“Kern County ordinances prohibit waste haulers from disposing of out-of-county waste in Kern County landfills unless approved by the Board of Supervisors. Benz Sanitation Inc. did not have permission to deposit Los Angeles County waste in landfills.” County officials further report that the Benz contract does not include a provision for county oversight.

By misrepresenting the origin of the waste, Benz avoided paying tipping fees in L.A. County. By mischaracterizing waste as residential the company avoided paying gate fees in Kern County.

The report states that the county was defrauded of in excess of $2 million since January 2008. (As part of the plea Benz paid $1.8 million to the county and $575,000 to the city of Ridgecrest.)

Following that revelation, city officials questioned whether Ridgecrest was ever truly out of compliance with the state mandate. Some have speculated that it was the numbers fabricated by Benz that caused the city to appear out of compliance.

But one county official suggested that Benz officials alerted the state to Ridgecrest’s supposed noncompliance — supported by their false reporting — because of the city’s refusal to accept an earlier proposal from Benz to start a recycling program.

Among the most disturbing testimonies is that of Kern County Waste Management’s former director, Daphne Harley, which states that the county knew about the influx in waste and did not deal with it.

In her testimony, Harley acknowledged as early as 2006 staff members began noticing a spike in waste deposited in the Tehachapi Landfill (which, among all county landfills, is apparently solely controlled by Benz and has neither scales, gate attendants nor records overseen by the county).

According to a briefing dated Feb. 5, 2007, and prepared by “DL” — presumably former operations manager and current director Doug Landon — inbound waste received at the Tehachapi MRF had increased by about 1,000 tons between April and May of 2006 and that all subsequent months continued that trend.

“The increase, if sustained, will have a significant impact on the remaining life projections for the Tehachapi Landfill,” states the report.

The findings noted that account information from Benz Sanitation has not been updated in its reports to the county. “Staff could not find any plausible source from within Kern County for the increase,” the report concluded.

Harley said in her testimony that she contacted a Kern County supervisor (although the name has been redacted, Don Maben was supervisor in Tehachapi at the time), who apparently looked into the issue, but did not rectify the situation.

She added that whenever there was a problem with Benz, company officials were never able to provide supporting documents and the most that was ever given was a verbal statement.

When asked why that behavior was allowed to continue, she replied, “We were hamstrung,” and that Benz was a major campaign contributor to many supervisors. Although the supervisor that Harley called out by name has been redacted, independent sources have identified this detractor as 1st District Supervisor Jon McQuiston. Since 2006 he has received $8,000 from the Benz family and their businesses.

The police report states that throughout Harley’s employment, “there were several instances where policies or procedures had a negative fiscal impact on the taxpayers, and when she would voice her concerns or recommendations, she was rebuked by the board and mainly [McQuiston].”

She told police she retired because she was “tired of fighting.” She further stated that on several occasions her budget, as well as project approvals, was threatened by McQuiston when she took a stance on issues opposing the waste haulers. He reportedly threatened Harley with termination if she opposed him.

Harley’s testimony states that she requested an audit of Benz Sanitation, whose business was reportedly commingled with related businesses Benz Propane and Benz Construction.

“After the audit, the board of supervisors changed the rules regarding the auditing of waste haulers to where the Kern County Waste Department could only ‘review’ records,” states a police summary of Harley’s testimony. “In the case of Benz Sanitation, requests for review were largely ignored or answered with the explanation that they could not provide the paperwork.”

Benz Sr. reportedly went to Harley’s office and verbally berated her using “vulgar and insensitive” language. After two of these incidents he apparently sent flowers of apology.

The News Review requested a response from McQuiston regarding these allegations, which he dismissed as untrue.

“The notion that we would ignore any issue in the county is absurd,” he told the News Review.

He said that he was never informed about the influx of tonnage, and that since he did not know about it he could not have known why it was not resolved then.

The News Review also asked a county attorney why the names of Benz and elected officials were redacted. According to laws governing public access to information, “State and local law enforcement agencies shall disclose the names and addresses of persons involved in, or witnesses other than confidential informants to, the incident … unless the disclosure would endanger the successful completion of the investigation or a related investigation.”

No response was available at press time.

An L.A. County official noted that one reason Kern County landfills were vulnerable to exploitation is that waste is not paid for as it was disposed of. While L. A. County charges to those dumping waste a tipping fee — ostensibly the cost Benz was trying to avoid by importing trash to Tehachapi — Kern County allows residential waste to be dumped for free, with the cost of operating the landfill being passed on to property owners through the tax rolls.

So the cost of L.A. County trash disposed of in the Tehachapi landfill was ultimately paid by the taxpayers. And, as noted in the 2007 staff report, the increased tonnage shortened the life of the facility.

The News Review learned that some portions of the case remain under investigation. However, officials of the RPD declined to comment further.

It remains unclear how Benz actions would change the company’s contract with the county. Terms of Benz Sr.’s plea require the company to make Benz operations more transparent to the county, including the provision of county audits of company financial records and tracking of company vehicles.

Landon said that his department is already working to take additional measures at the staff level to better verify the tracking and reporting numbers provided by Benz.

“I am confident that L.A. County waste is no longer coming into the county landfill,” he said, adding that the numbers being disposed have already been reduced by approximately the amount that RPD investigators indicated was coming in from L.A.

He said that although the settlement required GPS trackers and gatehouse audits, “We are going above and beyond what the attorney general has dictated.”

Revisions to the county’s contract with Benz will have to come before the board, said Landon. He said he expected an update and further action within the next few weeks.

Story First Published: 2012-11-07