Contact: Sunny Mindel/Curt Ritter (212) 788-2971
Ilene Chin (Trade Waste Commission) (212) 676-6288
Mayor Rudolph W. Giuliani joined by New York City Trade Waste Commission Chairman and Executive Director Edward T. Ferguson, III today announced that thousands of businesses in New York City will receive refunds totaling $3,375,000 as a result of the City's efforts to rid organized crime from the carting industry. These refunds will compensate more than 7,000 businesses that were overcharged by carting companies when the City's commercial waste hauling industry was controlled by organized crime. The refunds will be paid out of the proceeds earned from the sale of carting companies found to have a history of overcharging customers.
"For far too long, honest businesses in this City were victimized by organized crime that forced them to pay the highest prices in the nation for waste removal," Mayor Giuliani said. "Due to efforts by the City and the Trade Waste Commission, and investigations conducted by the Manhattan District Attorney's Office and the Police Department, this stranglehold has been broken, competition is vigorous, and carting rates are more than 50% lower than they were a few years ago."
The Mayor continued, "Not only has the City worked to remove organized crime from the carting industry, but the City is using its power to require carting companies that unfairly benefited from organized crime to refund money to its victims. This is an excellent example of government working to return money to the people who earned it."
Edward Ferguson, Trade Waste Commission Chairman, said, "Until the mid 1990's, there was virtually no competition in the City's carting industry. Carting companies effectively owned their customers and routinely charged them the maximum IegaI rate for waste removal service. Many carters exploited the situation further by charging their customers for more waste than they actually picked up."
Under Local Law 42 of 1996, carting companies must receive approval from the Trade Waste Commission before selling their businesses. In circumstances where the selling company has a demonstrable history of overcharging customers and there will be sale proceeds available for customer restitution, the Commission requires a refund to the selling company's customers as a condition of approving the sale.
"The customer refunds announced today are another example of the Trade Waste Commission's impressive achievements in restoring competition to thc commercial carting industry," said Senior Advisor Anthony Coles. "This vigorous competition continues to benefit thousands of businesses throughout New York City."
The Commission thus far has required refunds to customers of 22 carting companies. The total amount ordered to be refunded to date is $3,375,000. These refunds will be sent to over than 7,000 New York City businesses in the coming months.
The Trade Waste Commission is likely to consider the sale applications of at least 50 additional carting companies that operated during the cartel era. Mr. Ferguson stated added that "the Commission will not hesitate to impose customer-refund requirements on those transactions whenever the circumstances warrant."
Since the establishment of the Trade Waste Commission on June l, 1996, commercial carting rates in New York City have declined by more than 50% - from $14.70 per loose cubic yard of waste (the former maximum legal rate) to an average of approximately $7.20. This reduction translates into an annual savings of more than $500 million for businesses operating in the City.
In addition to Mr. Ferguson, the members of the Trade Waste Commission are Investigation Commissioner Edward J. Kuriansky, Consumer Affairs Commissioner Jules Polonetsky, Sanitation Commissioner Kevin Farrell, and Business Services Acting Commissioner Deborah R. Weeks. Mayor Giuliani also thanked the Police Department and the Federal Bureau of Investigation for their work and support of the Commission's efforts.
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