New Revelations in Landfill Corruption Case
Thursday, September 09, 2010
A GoLocalProv investigation uncovers other instances of alleged employee theft, conflicts of interest, and corruption at the state landfill, according to a series of lawsuits filed by the state agency that manages the landfill.
A key figure in the corruption scandal at the landfill is a former commissioner for the Rhode Island Resource Recovery Corporation, John St. Sauveur. In its suits, Resource Recovery accuses St. Sauveur not only of helping to steer work toward a money management firm in which he had a financial stake, but also helping his son’s title insurance company get work through the agency.
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St. Sauveur served as commission from 1991 to 2007. During 15 of those years, he also had a financial stake in the Van Liew Trust Company, which Resource Recovery hired in 1996 to manage a pension fund and a trust fund for cleaning up environmental waste. St. Sauveur served as a compensated director and trustee for Van Liew and also worked as a consultant for the company.
Resource Recovery cites a number of “bidding irregularities” such as inconsistently weighted criteria, that indicate the agency “improperly skew[ed] the bidding and selection process” toward Van Liew. Resource Recovery says that St. Sauveur didn’t disclose his relationship with the company and didn’t properly recuse himself from discussions and votes on its contract.
“It is likely that St. Sauveur’s relationship with Van Liew is what enabled it to be chosen as RIRRC’s investment advisor over other companies which would have had higher scores had RIRRC correctly applies its stated bidding criteria,” the agency states in a document outlining its losses due to alleged employee theft.
Resource Recovery is hoping to get back an estimated $3 million in money lost in the deal by suing the Travelers insurance company, which provided it with a policy covering employee theft.
Commissioner Helped His Son’s Company
As a Resource Recovery commissioner, St. Sauveur is also charged with helping to kick work to his son, Jeffrey A. St. Sauveur, and his business, Pilgrim Title Insurance Company.
Pilgrim was the insurance company and settlement agent for the sale of seven properties to Resource Recovery in which the sale price was inflated and at least one of the properties was contaminated. His company received a total of more than $20,000 for the work.
Jeffrey St. Sauveur and Pilgrim are among two dozen defendants in a separate lawsuit Resource Recovery filed last Friday over the land deals, which cost it a total of more than $15 million in wasted money.
Besides being over-priced and, in some cases, contaminated, Resource Recovery raises a number of other red flags in the land deals.
Land Deals Plagued with Problems
In its suit, Resource Recovery claims that the properties were over-priced and in some cases contaminated. But it says there were other problems on top of those.
One involves the $2 million purchase of 67.9 acres from former Johnston Mayor William Macera. The land was supposed to be a source for cover materials for the landfill, but a subsurface investigation found that the soil had too much silt to be used for fill or cover material, according to Resource Recovery. The former executive director of the agency, Sherry Mulhearn, knew about that in August 2001, but still went ahead with the purchase in April 2002, according to Resource Recovery.
Even worse, Resource Recovery says that Macera had taken out a conservation easement on the land back in 1995—but didn’t tell anyone at the agency. The easement barred any “excavation, digging, dredging, mining, quarrying…, removal or disturbance of topsoil, sand, gravel, rock, minerals, or other materials.”
In another deal, Resource Recovery was about use eminent domain to acquire 10 acres owned by Johnston resident Dania Rizzo. But then it offered to buy the land for $1.4 million. “Curiously, Dania Rizzo’s husband was offered a job at RIRRC as part of the deal,” the agency states in its suit. “There is no rational or legal explanation for why the eminent domain process was not used or why the final purchase price was $600,000 greater than the already-inflated appraisal value.”
What’s Next for Resource Recovery?
The suit over the land deals is now pending at Providence County Superior Court. The suit against the Travelers insurance company is before U.S. District Court and is mired in a series of pre-trial motions. Thomas Holt, the attorney for Resource Recovery, declined to discuss details of the pending litigation. A spokeswoman for Travelers also declined to comment on the suit.
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