Recology is no stranger to trouble.

The San Francisco garbage giant, and its predecessor firms, have been plagued by scandal for decades.

A company executive once conspired to bribe a public official in Southern California. A subsidiary of Recology was investigated by the FBI for hiring a prominent state politician to further its interests. Down in San Jose, the company was accused of conspiring to bribe the mayor to influence its contract.

Yet none of these controversies stopped Recology from leveraging its longstanding monopoly on waste collection in San Francisco to build a garbage empire that spans the West Coast, from California to Washington to Oregon.

Now, a new cascade of developments surrounding Recology and the ongoing corruption investigation at San Francisco’s City Hall could weaken that empire. The scandal led to the company and its subsidiaries agreeing to pay major penalties to both the federal government and The City, hoping to make things right and forestall renewed calls to dismantle its long-held local monopoly.

The scandal with The City directly involved the rates San Franciscans pay for garbage collection, giving new leverage to Recology critics who argue that breaking up the monopoly would drive down costs for local ratepayers. As it stands, the owner of every home and business, or their tenant, in San Francisco is required by law to pay Recology for trash pick-up.

How did we get here? In the nearly two years since authorities arrested San Francisco’s former Public Works Director Mohammed Nuru on fraud charges, the probe has ensnared a bevy of city officials and contractors, including two recently departed Recology executives in charge of the company’s local operation. Last month, three Recology subsidiaries admitted to conspiring to bribe Nuru in exchange for his help raising garbage rates.

Retired Judge Quentin Kopp, a longtime Recology critic who has tried to break up the monopoly for years, said the bribery scandal highlights the importance of the exclusive arrangement to the company’s bottom line and reveals the ends to which its representatives were willing to go to maintain it.

“What they have done is insinuate themselves in all the city departments which affect their monopoly,” he said. “You have got to keep the monopoly.”

To understand how the company came to control — and, as critics say, exploit — this lucrative monopoly, one has to go back to the very beginning.

Pasquale, Domenic and Alfred Fontana work on a horse-drawn garbage wagon in 1932. The three brothers, all Italian immigrants, were one of many garbage “scavengers” who were integral in the founding of companies that eventually became Recology. (San Francisco History Center, San Francisco Public Library)

Scavengers and scandals

Recology’s roots go back more than a century, when Italian immigrants, known as scavengers, hauled garbage across San Francisco on horse-drawn wagons, and the trash ended up dumped in the Bay.

Its earliest predecessor firms date back to 1920, when scavengers banded together to form two companies: the Sunset Scavenger Company controlled the residential parts of town, while the Scavenger’s Protective Association (later known as Golden Gate Disposal) worked downtown.

Its lasting power really came over a decade later, when voters approved an ordinance in 1932 that divided San Francisco into 97 garbage routes and allowed only permitted companies to work them. Soon after, its predecessor firms bought out all their smaller competitors and secured every permit issued under the ordinance, creating an early version of the monopoly.

Recology’s predecessor firms hauled large bags using scavenger wagons, shown here in 1936. (San Francisco History Center, San Francisco Public Library)

After becoming president of Sunset Scavenger in 1965, Leonard Stefanelli dreamed of uniting the two firms on the basis of their shared Italian heritage.

“La Cosa Nostra — ‘Our Thing’ — is a traditional term used to refer to the so-called Sicilian Mafia,” Stefanelli wrote before his death in a 2018 memoir entitled, “Garbage: The Saga of a Boss Scavenger in San Francisco.” “It aptly described the program that I was beginning to envision, if it became a reality.”

Stefanelli would ultimately be ousted before his dream came to fruition.

It wasn’t until 1987 that the two firms merged to become Norcal Waste Systems, creating the modern-day monopoly that exists today.

In 2009, the firm changed its name to Recology to reflect its expansion beyond Northern California and its commitment to the environment. The firm is now the only licensed refuse collector in San Francisco today, running a specialized composting and recycling operation that trucks away San Francisco’s garbage and dumps only what can’t be saved in a landfill.

But behind that story of innovation and expansion is a darker history of scandal.

In 1990, news broke that the FBI was investigating a Norcal company for hiring then-Assembly Speaker Willie Brown as its private attorney while seeking to develop a landfill in Solano County. All parties denied wrongdoing at the time, and the probe did not ultimately result in criminal charges.

In 1999, Norcal became embroiled in a bribery scandal over a lucrative garbage contract while growing its business in Southern California. A Norcal vice president and a consultant for the firm pleaded guilty to federal charges for conspiring to bribe a top San Bernardino County official in exchange for his official influence. While Norcal cut ties with the executive and its consultant, the high-profile scandal tarnished the reputation of both the county and the company.

Then in 2006, years after the San Bernardino case, Norcal was caught up in another bribery scandal, this time involving an alleged backroom deal with then-San Jose Mayor Ron Gonzales and a top aide. While Norcal was indicted, a judge ended up tossing the case, calling the allegations politics, not bribery.

While raising questions about its capacity for corruption, none of those scandals struck as close to home as the one embroiling Recology today.

Money and power

Under the 1932 ordinance, Nuru played a key role in setting garbage rates in San Francisco as the director of Public Works. He had a say in whether a panel known as the Rate Board should increase the rates Recology charged residents, and by extension its commercial customers.

Recology also wanted his help as a top official raising the fees it charged San Francisco to dump construction materials at a facility in The City.

So its San Francisco companies showered Nuru with gifts to please him, according to court documents in three cases the U.S. Attorney’s Office filed against the firms and two of their former executives, Paul Giusti and John Porter.

Every other month, Giusti arranged for a Recology company to cut a $30,000 check to a nonprofit called the Clean City Coalition. The coalition would then take a 5% cut and transfer the remaining funds to another nonprofit, the San Francisco Parks Alliance. There, the money landed in two accounts controlled by Nuru, including one prosecutors describe as his “slush fund.”

While federal authorities did not name the two nonprofits in charging documents, they have since been identified by the Controller’s Office.

Giusti funneled about $1 million from the Recology companies to Nuru in this way, prosecutors said. While the payments were ostensibly to benefit an anti-littering program called “Giant Sweep,” Nuru allegedly dipped into one of the funds to buy T-shirts, caps and other stuff for his staff, and also to help pay for increasingly luxurious Public Works holiday parties.

“Mohammed is the director of (Public Works) who ultimately signs off on our rates. Needless to say, keeping him happy is important,” Porter, who is accused of approving the payments, allegedly wrote in an email obtained by the FBI.

Keeping Nuru happy also meant cutting checks totaling $60,000 to a baseball charity for children, the Lefty O’Doul’s Foundation for Kids, prosecutors said. But instead of helping children, the money went toward putting on holiday parties.

On top of those payments, a Recology company hired his son as a laborer and funded paid internships for him at a nonprofit, where he remained on the payroll despite falling asleep at work, according to the U.S. Attorney’s Office.

After conducting his own investigation into the payments, City Attorney Dennis Herrera concluded that Recology’s relationship with Nuru allowed its companies to overcharge San Franciscans nearly $95 million for garbage collection.

In December 2018, Recology and Public Works discussed an error in the rate-setting process that caused prices to go up for San Franciscans, Herrera said. But neither Recology nor Public Works corrected the problem — and Recology continued to overcharge its customers for two years, he said.

A Recology driver lines up recycling and compost bins for collection on Oct. 22. (Kevin N. Hume/The Examiner)

Paying penance

Recology now pledges to stay on the straight and narrow.

While disputing that the overcharging was intentional and describing the error in the rate-making process as a mistake, Recology has since admitted that its San Francisco companies engaged in a conspiracy to bribe Nuru.

Those companies, Recology San Francisco, Sunset Scavenger Company and Golden Gate Disposal & Recycling, have reached an agreement with the City Attorney’s Office to refund ratepayers $95 million, return garbage rates back to justified levels and pay a $7 million civil penalty.

Separately, an agreement with the U.S. Attorney’s Office will allow the Recology companies to avoid a fraud conviction by admitting to the conspiracy and paying a penalty of $29 million to the federal government.

While Giusti has agreed to cooperate with the investigation and plead guilty to bribery and fraud charges, cases against Nuru and Porter are pending.

Recology is now essentially asking San Francisco for forgiveness.

“This is a humbling moment for our company,” Recology spokesperson Robert Reed said. “Recology was born and raised in San Francisco, and has served this city for more than 100 years. We are proud to have built our nationally recognized recycling and composting program from the ground up.”

Recology shook up its leadership after the scandal broke. Longtime CEO Michael Sangiacomo retired at the end of 2020, and was replaced by former Executive Vice President and Chief Operating Officer Sal Coniglio.

In a video statement posted online in response to the agreement with federal prosecutors, Coniglio said the deal allowed Recology to “own up to the mistakes of the past, while continuing to serve you long into the future.”

“I want to make it clear that this type of mistake and this type of conduct was wrong and unacceptable,” said Coniglio, who Recology declined to make available for an interview. “We must ensure that nothing like this never happens again.”

‘The system has been exploited’

Supervisor Aaron Peskin is set on ensuring the corruption stops there.

Peskin is considering sponsoring a ballot measure that would break up the monopoly. He has formed a working group to examine different models for restructuring garbage collection in San Francisco.

Those options include allowing other companies to bid against Recology to provide garbage collection services, creating a municipally owned trash collector or reforming the 1932 ordinance to include anti-corruption measures.

“The system has been exploited,” Peskin said. “They clearly were charging more than they should, the system didn’t work and either we need an entirely new system or we have got to (implement) fail safes.”

Should Peskin decide to move forward with a ballot measure, he could face stern opposition from Recology.

In 2012, Recology outspent its opponents 55-to-1 to defeat the most recent of three attempts at the polls to inject competition into the garbage business, spending $1.7 million to crush his anti-monopoly ballot measure.

While Recology says it offers residents competitive rates compared to other parts of the Bay Area, opponents argue that opening up the business to competitive bidding would inherently lower costs for San Franciscans.

“That’s why for all city and county construction contracts, or equipment supply contracts, competitive bidding is required,” said Kopp, the retired judge. “There is no other monopoly in city and county government.”

Former Supervisor John Avalos was one of the few officials who expressed support for the 2012 measure. He recently described what it’s like to go up against the politically powerful company.

“It feels like intimidation, but you’re not quite sure where it’s all coming from,” Avalos said. “There are a lot of different groups that work together to create that pressure on you, and they come from the highest levels of government to the company itself, its lobbyists (and) labor organizations.”

The measure was rejected overwhelmingly, with nearly 77 percent of voters backing Recology.

Hanging in the balance for Recology is its lucrative monopoly. Over a year-long period ending in 2020, Recology companies reported $170 million in revenue from residential garbage collection alone, as well as another $166 million from the commercial side of the business, among other revenue streams.

Reed defended this monopoly by saying that it was beneficial for both San Franciscans and the environment. He said monthly charges for residents are less expensive in The City than for customers in Oakland and San Jose.

Residents pay $43.04 a month in San Francisco for basic trash pick-up services, compared to $52.36 in Oakland and $51.15 in San Jose, according to Reed.

By comparison, an Examiner review of monthly garbage rates on the Peninsula shows residents pay $31.31 for basic service in Daly City and $31.93 in San Bruno.

Reed defended the monopoly as being “heavily regulated.” He said Recology is committed to “delivering tremendous service and fair value to our customers, providing good-paying union jobs to local workers, and advancing industry-leading environmental programs.”

mbarba@sfexaminer.com

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Nearly 190 San Francisco police and firefighters were still not completely unvaccinated hours before the midnight deadline for these city workers to shoot.

Police Chief Bill Scott told the Police Commission on Wednesday evening that 118 sworn police officers – 5% of all sworn officers – remain unvaccinated and 61 are partially vaccinated. Another 31 non-sworn employees are unvaccinated and 11 partially vaccinated.

A spokesman for the police department said Thursday morning that the numbers are “likely” to change, but has not yet been able to give an exact number. It was not immediately clear how many had not reported their vaccination status, which was also required by the deadline.

The police have 2,835 employees, including 2,122 officers.

That is compared to the fire brigade, where 39 employees had not received any shots by Thursday. Everyone got in touch. This department has 1,788 employees.

San Francisco police and firefighters had to be fully vaccinated by 11:59 p.m. Wednesday evening – that is, 14 days had passed since their last vaccination.

According to the city’s human resources department, police and fire fighters who have not been vaccinated will be notified immediately by human resources that they will no longer be able to do their jobs until they are vaccinated. You will be put on paid leave until your case comes to the police or the fire brigade.

The commissions will recommend disciplinary action to the police and fire chiefs, which may include dismissal, which will then ultimately determine the future of the employee.

Employees can receive medical or religious exemptions. Almost 200 police officers have already requested religious exemptions, which is by far the highest number of exemptions of any city agency. 26 workers applied for either medical or religious exemptions from the fire department by Wednesday.

As of the beginning of this week, the HR department had not made any final decisions about exceptions, a spokesman said on Thursday.

The San Francisco vaccination mandate, the first and one of the strictest in the country, aroused some opposition from unions, particularly from law enforcement. Workers in high-risk environments such as hospitals, nursing homes and homeless shelters faced a vaccination mandate as early as September 30, while the rest of the city’s 35,000 workers must be vaccinated by November 1.

The police are prepared for the possibility of operating and continuing to provide critical services without unvaccinated employees.

Two weeks ago, Police Chief Bill Scott said in an email that the department would be shifting staff to remove unvaccinated workers from patrol, where they regularly interact with the public, and said the department would continue to provide vital services without the unvaccinated Officials could provide.

The number of unvaccinated people in the police force fell as the deadline drew nearer.

On October 5, 189 members were unvaccinated. Among them were 155 sworn members, 97 of them on patrol and 34 non-sworn members.

Mallory Moench is the author of the San Francisco Chronicle. Email: mallory.moench@sfchronicle.com Twitter: @mallorymoench

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Three games in San Francisco everything seemed to go wrong for the Cubs.

When they caught a few breaks in the ninth innings on Saturday, they couldn’t take advantage and dropped their third game in a row at the bay.

It’s like the tables have been turned for the Cubs. All of those things the Cubs did to win nine of their previous 10 games are now part of the Giants’ raffle roster. With pitcher Kevin Gausman limiting the Cubs to 2 hits through 7 innings, San Francisco pulled out a 4-3 win on Saturday.

“I don’t think we played terrible baseball,” said manager David Ross. “Today I thought your mug was damn good.”

On the third day in a row, the Cubs took an early lead thanks to a home run. This time it was Patrick Wisdom, who shot his fifth home run in 12 games since joining the team, giving the Cubs 2-0 lead in the second inning.

Otherwise, the Cubs’ thugs were baffled by Kevin Gausman’s Splitter. Gausman, 30, has been a journeyman starter with limited success for most of his career. But he improved to 7-0 that season with a 1.27 ERA.

“This is a difficult place to sit in,” said Wisdom. “I wouldn’t necessarily call it a sliver either. He can make it do different things. Sometimes it goes straight down like a sliver and sometimes it fades like a change. It’s a tough place to sit on.

“Fortunately, I hit a fastball that he left in the middle of the plate well. It’s difficult with a guy like that, you might see a good pitch to hit. Fortunately, I was able to put a barrel on it.”

Kohl Stewart made his second start with the Cubs but wasn’t as effective as on his debut. Holding on to a 2-1 lead, Cubs pitchers gave up leadoff walks in both the fourth and fifth innings and both runners scored a result.

When Ross turned to rescuer Tommy Nance to get out of the fourth inning, he might have made it a blow too late, as the last hit Stewart faced was Lamonte Wade Jr., who kicked off the finish line.

“They put tough ABs together,” said Stewart. “They bring the ball into play and put pressure on you on the grassroots. I just didn’t have a heat command today and couldn’t get a feel for my sinker. I fell behind a lot in the end and the guys made me pay for it.”

After 4-2 in the ninth inning, the Cubs eventually got a series of breaks. Rafael Ortega took out and made a mistake. Then Kris Bryant missed a perfect double play ball, but second baseman Mauricio Dubon dropped the ball on the transfer and Bryant was initially safe.

After a Javy Baez single, Anthony Rizzo hit another double play ball short and this time the left side of the Giants infield, Brandon Crawford and Evan Longoria collided. Longoria had to leave the game, Bryant scored and the Cubs had two runners on base.

Willson Contreras faced the San Francisco submarine pitcher Tyler Rodgers and hit a 3-2, 71 mph slider. Then Jason Heyward rose to end the game.

“It’s definitely hard to lose three in a row,” said Wisdom. “Losing is no fun, whether it’s one or three. I think this team is good at flushing it. Understand what happened, where we made mistakes, what we need to do better and how we did the next day go ahead and the negativity, I think we can flip the switch. “

Cory Abbott made his major league debut, putting on two goalless innings.

• Twitter: @McGrawDHBulls

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BRENTWOOD (KPIX) – The cherry harvest in Brentwood is the one weekend of the year when many city slicker farmers are allowed to play. This year, Mother Nature arranged for weather to add some realism to the romance.

For many in the Bay Area, picking their own cherries on U-Pick farms like the Bacchini fruit tree is a Memorial Day holiday tradition. Six-year-old Isabella Hastings said it could be a little difficult.

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“Because they have to be dark red,” she explained.

Thanks to COVID-19, picking cherries in Bacchini this year was only possible with prior reservation.

Ken Hagan, co-owner of the farm, said online appointments would need to be set up last season. Since then, they have found that limiting the amount has its advantages, such as keeping things from getting too competitive.

“People would actually get possessive of a particular tree and try to keep people away,” he said with a laugh. “It was a very interesting experience for me.”

It still got quite hot on Sunday thanks to the sun and a high pressure system moving over the state. By noon the temperature was in the mid-90s and Hagan said that was ironic because the season so far has been very mild.

“We’ve actually been cooler so far,” he said. “Today we should reach 100 degrees, I think, and tomorrow even hotter. So that will accelerate the maturation of things. “

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It also sped up Darrel Chak as he tossed a box of cherries over to his car and returned to the coolness of his Daly City home.

“I got here around 11 am,” he said. “We’re here maybe an hour and a half and in this sun it gets a little hot!”

On the other hand, Steve Argilla, who lives in Hayward, likes to come to farmland. He said he considers it a fun life experience and doesn’t even care about the heat, although he admits he’s not prepared for it.

“In the Bay Area, closer to the bay, do we rarely get that kind of heat to say I’m ready for any kind of heat like this? No, ”Argilla admitted.

Hagan says the month of May has gotten hotter in recent years. He says this year’s weather pattern – cool temperatures with a warm up on Memorial Day – is actually what it used to be.

What draws people from the city to the cherry plantations every year? There is something satisfying to the soul braving the elements and spending time harvesting your own food, but for most people the heat – like the farm itself – is nice to visit but they don’t want to live there.

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“The great thing is that it’s only an hour’s drive away,” said Hagan. “I mean, you can just get out of here, experience it, and you’ll be home tonight.”

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CONCORD (KPIX) – Contra Costa County’s housing lawyers warn property owners are using loopholes in the state’s eviction moratorium to force tenants out of their homes.

“It’s a myth that there is full protection and that there are no evictions,” says Kristi Laughlin, who works for the charitable path to living.

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The organization held a march and rally in support of Manuel Caballero and his family, who moved out of their Concord apartment on Friday evening.

“It’s very hard. My kids cried yesterday because we were moving. They said where are my clothes? Where are my stuff?” says Caballero, who worked as a wedding and event photographer until the pandemic.

Caballero says when his photo business dried up, he slipped back on his rent in August last year. He and his wife have four children between 12 and four months.

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The state’s eviction moratorium should have protected him from being forced out of his home for not paying rent. State lawmakers drafted the eviction moratorium to protect tenants from the financial consequences of the pandemic.

However, Caballero said the owners of his apartment had told him they were removing the property from the rental market, essentially depriving him of the protection of the state moratorium.

A lawyer representing the owners tells KPIX 5 that its clients have negotiated a settlement in which Caballero and his family agreed to leave the apartment by April 30th. The attorney says his clients are small mom and pop owners and Caballero’s inability to pay his rent jeopardizes their ability to pay their mortgage.

Caballero says he hasn’t found a new apartment for his family. Housing lawyers have raised money to temporarily stay in a hotel room.

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“You grew up there. My children were there for ten years, ”said Caballero.

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