Republic mulling legal options regarding ethanol bid, hauler official says

A region trash hauling and landfill official said Wednesday his corporation is considering legal action, alleging possible fraud in a county trash contract bidding process and violations of interstate commerce and anti-trust laws.

Republic Services Inc. government liaison Jim Metros made those statements Wednesday after a special meeting of the Crown Point City Council during which the council unanimously passed a resolution seeking information from the Lake County Solid Waste Management District regarding its trash-to-ethanol plan.

In 2008, Metros' company lost the bid to consolidate the county's trash processing to Powers Energy One of Indiana LLC, a firm that promises to build and operate a facility that would convert the county's organic trash to ethanol.

Metros said his company now believes the bidding process the county used to award the Powers contract may have been flawed.

"We're now reading some accounts that suggest there could have been fraud involved in the bid process," said Metros, who is a former Crown Point mayor. "We're exploring our legal options there."

Metros was referring to published reports in The Times on Sunday in which four of eight firms listed in the original Powers bid proposal said they were never involved in the Lake County project.

Jeff Langbehn, executive director of the solid waste district, said he had no comment regarding any threats of legal action against the district.

Metros also echoed previously reported claims by the National Solid Wastes Management Association that the future trash-to-ethanol plant to be built in Schneider could violate interstate commerce laws because local government would be unfairly routing trash to a private company -- Powers Energy -- even though the county would own the facility physically.

Prior to Metros' statements, the Crown Point City Council adopted a resolution seeking more information about the planned facility.

Councilman Bob Corbin and other council members pushed for the resolution, saying they were unsatisfied with previous disclosures from the solid waste board regarding any taxpayer liability that may be involved in the deal. Corbin said he also remained concerned about the past refusal of the waste district to disclose the names of investors in the project or show detailed analysis of the plant's economic viability.

The Crown Point resolution came one day after the Griffith Town Council voted 5-0 to reject participation in the planned trash-to-ethanol plant, urging all other Lake County municipalities to follow suit.

Prior to Wednesday's meeting, solid waste district lawyer Clifford Duggan delivered to Crown Point council members a nine-page letter that he contends answers many of the questions set forth in the resolution.

As he has claimed before, Duggan states in the letter that clauses in the contract protect taxpayers from any liability if the plant -- which relies on technology that is commercially unproven on the scale proposed in Schneider -- fails.

Critics have contended the "hold-harmless" clauses may not protect the county from lawsuits filed by other entities, including bond holders or other investors, if something goes wrong at what will be a taxpayer-owned plant or if the business plan fails.

Corbin said he read through Duggan's letter but remained unsatisfied with the answers, saying the Wednesday resolution requires responses from private owners and investors financing the plant as well as engineers.

"Why will no one name who the investors are in this process?" Corbin asked during an interview with The Times prior to the council meeting. "They're going to have to do that and much more for any bonding or to obtain any financing. Why not disclose that upfront?"

Though the district and trash-to-ethanol company owner Earl Powers have divulged a handful of names of people who hold stakes in Powers' company, they have declined to name majority investors for the Lake County project, citing confidentiality agreements.

Crown Point Mayor David Uran, who also sits on the solid waste management district board, said getting answers to questions in the resolution was important for the city before its leaders consider whether to sign on to the trash-to-ethanol plan and ship the city's trash there.

source: nwtimes