It's Time to Discuss Organized Crime and Public Vs. Private Ownership of Trash Empires

The New Milford Town Council had a discussion about the region's efforts to put James Galante's trash transfer station under public control.

It was an amazing discussion -- one disconnected from the reality facing this region.

Galante is in federal prison, having pled guilty to conspiracy, racketeering and tax charges. But the mess he left behind is still being sorted out.

Fortunately, most of the region's elected officials are working hard and working together to protect local residents and businesses from a repeat of Galante's abuses.

Galante ran a scheme to limit competition that was enforced by the muscle of organized crime. Competitors and customers were threatened. It took an aggressive investigation by the FBI to shut Galante down. But to listen to New Milford Town Council member Joseph Failla, there's too much mention of Galante's connection to organized crime.

Failla was offended by the mention of it in a resolution offered by the Housatonic Resources Recovery Authority in support of Danbury's attempt to obtain ownership of Galante's transfer station on White Street in Danbury.

"It was more a grandstanding," Failla told the council. "I don't think an organization such as HRRA is in the position to comment and label in this resolution," he said, finding support from other council members.

Failla and other council members also criticized public ownership of the transfer station. "Public government doesn't belong in private business," Failla said.

These people should meet Matthew Ianniello, known as "Matty the Horse." He's the Genovese crime family boss who federal prosecutors say received regular payments from Galante in return for organized crime muscle. Like Galante, Ianniello copped a plea. They also could inform themselves by reading the court documents that quote court-ordered wiretaps on Galante and his cohorts. The wiretaps tell the story of the abuse perpetrated against this region.

Public ownership of the transfer station is necessary. The region's trash is trucked to the transfer station and then shipped out. It is the key ingredient in the region's trash disposal network. All haulers and all customers should receive equal treatment at the transfer station, which was not the case under Galante.

If another monopoly obtains control of Galante's trash empire, it will invite a repeat of Galante's abuses -- including the involvement of organized crime.

Organized crime is real. No purpose is served by pretending it's too dirty to mention, in public or in public documents.

Just ask Matty the Horse.

Newstimes Editorial

Tweet

FBI Cleans Up the "Trash Czar" and The Waste Management Industry

He was dubbed the “trash czar” by the media—James Galante, businessman and majority owner of 25 trash companies that controlled about 80 percent of the trash, or carting, industry in Connecticut and parts of eastern New York. But earlier this summer, Galante’s reign ended when he pled guilty in federal court after a long-term multi-agency investigation of wrongdoing in the waste-hauling industry. Thirty-two others—including Galante’s employees, his accountant, a silent partner with ties to New York organized crime, and a high-ranking member of the Genovese crime family—were also charged in the case and have all pled guilty.

Galante was operating what’s known as an illegal “property rights system”—when carting companies affiliated with organized crime groups assert they have a monopoly over certain “stops,” or customer accounts (mostly commercial and municipal customers in this case). These companies collude with one another to divvy up the stops, fix prices, and rig contract bids. They also pay a so-called “mob tax” to keep their piece of the action.

The result is a loss of competition and higher prices for customers. And woe to the carting companies that try to compete legally in this type of marketplace. They find their trucks and other equipment vandalized, their employees threatened or assaulted by mob muscle, and their economic livelihood at stake.

The FBI's case began in February 2003, after Galante sent a threatening note to another trash company over a disputed contract. The company contacted the FBI's New Haven office, and they decided to introduce an undercover agent into the mix. The agent started working as the victim company’s “strategic marketing planner,” with oversight over new trash hauling contracts that put him in direct contact with Galante and his people. Later, the undercover agent was actually hired by Galante as a salesman.

During the operation, which also included extensive use of court-authorized wiretaps, the FBI discovered more than 40 refuse companies working within the property rights system. They identified links between Galante’s enterprise and organized crime. They collected mounds of evidence against Galante and other members of his criminal enterprise. And because they intercepted phone calls containing threats against individuals and companies, they were able to warn intended victims.

Public corruption also reared its ugly head. For a property rights system to work, a criminal enterprise needs the help of corrupt local government and/or law enforcement officials. And so it was in this case—also charged were a former mayor, a federal drug agent, and a Connecticut state trooper who unlawfully accessed the FBI's National Crime Information Center database to check a license plate for Galante.

Special thanks to the FBI's partners who worked with them on this case—the Ansonia, Milford, and New Haven police departments; the Connecticut State Police; the Connecticut Department of Corrections; the Internal Revenue Service; the Department of Labor; the Drug Enforcement Administration; and the Marshals Service.

Part of Galante’s plea agreement involves the full forfeiture of his companies, which were valued at up to $100 million. The federal, state, and local law enforcement agencies who worked with the FBI will be receiving millions of dollars in forfeiture proceeds. And one other note: because of the case, a new state agency in Connecticut now oversees the refuse hauling industry and requires background checks on trash companies.

Tweet

The Feds Say That Galante Diverted Millions from Trash Businesses

Friends of ours: Matthew "Matty the Horse" Ianniello, Genovese Crime Family
Friends of mine: James Galante, David Magel

A Danbury trash magnate arrested in a Mafia case in June diverted millions of dollars from his businesses to his minor league hockey team, no show jobs, race cars and questionable stockholder repayments, federal authorities said Thursday.

James Galante, whose businesses handle about 80 percent of southwestern Connecticut's garbage, carved out exclusive routes for his companies and paid Genovese crime family boss Matthew "Matty the Horse" Ianniello $120,000 a year for mob muscle to enforce his territories, authorities said. That meant higher prices for businesses and homeowners, authorities said.

Galante and Ianniello were among 29 people arrested in connection with the alleged scheme. In a related development Thursday, another trash hauler became the first defendant in the case to plead guilty.

Galante's defense attorneys challenged a court order putting federal marshals in charge of his businesses, saying they were ruining the businesses. But federal authorities said they had improved the cash flow by stopping diversions that amounted to more than $4 million last year. They also said the businesses are now facing competition.

"If any 'blame' is to be assigned for the changes wrought by these incidents, it lies squarely on the shoulders of the defendants, who decided many years ago to operate the 25 companies as an illegal bid-rigging and price-fixing cartel," prosecutors wrote.

A hearing is planned Tuesday on the challenge to the federal monitoring. "Our position is by their own admission they're running it into the ground," said Hugh Keefe, Galante's attorney. "You took a guy's business away from him and turned it over to a bunch of incompetents."

Keefe said the reported diversions will be dealt with during the trial. "Even if that was true, the business itself was thriving up until the day the feds decided they knew more about running a trash business than Jimmy Galante."

Authorities said they were monitoring the businesses, not taking them over, and denied they intended to sell the businesses. Galante owns the Danbury Trashers team of the United Hockey League. The team was disbanded after Galante's arrest in June.

Meanwhile, the trash hauler who admitted his involvement in the scheme Thursday, David Magel, 33, of Baldwin Place, N.Y., pleaded guilty to a racketeering charge in U.S. District Court in New Haven. Magel is general manager of CRP Carting in Elmsford, N.Y.

Prosecutors said the scheme was enforced by extortion and threats, and participants sought to operate it in eastern New York. Magel met with several other members of the enterprise, two of whom were associated with an unidentified Connecticut-based trash carting company, at a diner in Mt. Kisco, N.Y., in 2004, authorities said.

After the meeting, Magel engaged in a series of telephone calls with other members of the enterprise to implement the scheme, prosecutors said. On Dec. 21, 2004, investigators intercepted one conversation between Magel and two members affiliated with the Connecticut carting company during which Magel agreed to provide inflated quotes to customers of the other participants in the conspiracy, authorities said.

"I'm shootin' for the ... gusto here," Magel said in the conversation. Magel faces up to 20 years in prison and a $250,000 fine when he is sentenced Oct. 25.

Keefe said he was not sure if Magel's guilty plea would affect Galante. Authorities would not comment on whether Magel was cooperating against the other defendants.

Thanks to John Christofferson

Tweet