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The city has appointed a monitor to oversee the work of a troubled trash hauler after Crain’s reported that the company had been accused of extensive rulebreaking shortly before winning a sought-after city contract.
The company, Cogent Waste Solutions, had been accused by a city watchdog last year of overcharging customers nearly 5,000 times and falsifying records, among other allegations — charges that could amount to some $48 million in fines if proven. Nonetheless, just weeks after those accusations were lodged by the Business Integrity Commission, the city’s Sanitation Department announced Greenpoint-based Cogent as one of the 18 companies chosen to haul businesses’ trash as part of a long-awaited program that will reform New York’s unruly commercial waste industry.
During a City Council hearing on Monday, Sanitation Commissioner Jessica Tisch said that Cogent will be overseen by a new independent monitor: Walter Mack, a former federal prosecutor and NYPD deputy commissioner. Mack will also monitor a second company, New York Recycling Solutions, in which Cogent has a 50% stake.
The Sanitation Department decided to appoint the monitor after learning of the “record-high number of counts” filed against Cogent in December, Tisch said. The 4,764 violations, which remain pending, were issued last year and stemmed from a yearlong audit by the BIC based on customer complaints.
Shaun Abreu, a Manhattan lawmaker who chairs the council’s Sanitation Committee, pressed Tisch to explain why Cogent had been chosen to help spearhead the new commercial waste program, given that each applicant was supposed to be evaluated for its “history of compliance” with the law. Tisch, in response, said the counts against Cogent had to be weighed against more than a dozen other factors — such as the hauler’s technical plans and ability to charge reasonable fees to the businesses it will serve.
“We have no indication at this time that Cogent will not continue to be able to operate,” Tisch said, addressing what would happen if the fines are upheld. She added that Cogent and New York Recycling Solutions will bear the cost of the monitor.
Monday’s hearing focused on the upcoming reforms that will divide the city into 20 commercial waste zones, each assigned to a specific list of private carting companies. The reforms stem from a 2019 law that aimed to tame New York City’s chaotic current system, in which dozens of companies speed around the five boroughs in a race to serve 100,000 businesses — resulting in unsafe driving, rampant crashes and excessive carbon emissions.
The first zone will launch this fall in Central Queens, with the remaining zones to follow at some point after. Cogent Waste Solutions will haul trash in three Brooklyn zones and one in Staten Island.
When Crain’s first reported on the case against Cogent in February, a Sanitation spokesman pointed to the department’s authority to appoint a monitor, although nothing was announced at the time. The rules of the waste zone program also allow Sanitation to terminate any hauler’s contract if its employees are implicated in criminal offenses or if BIC revokes its license.
David Vermillion, a spokesman retained by Cogent, said in a statement on Monday that the company “will work proactively with the city-appointed monitor to meet our collective goals: keeping the city’s streets clean and safe.”
“Cogent was awarded this contract through a thoughtful, competitive review process and we are dedicated to providing safe and reliable service with integrity,” he said.
Vermillion defended Cogent’s practices, calling it “an innovative New York company born and raised in Brooklyn that provides meaningful employment to over two hundred unionized New Yorkers.”
“We maintain the most rigorous safety standards in the industry, using new equipment operated by qualified union employees under the supervision of highly-trained, certified safety professionals and 24-hour video and GPS surveillance,” he said.
‘Put themselves under our lens’
BIC, which lodged the complaints against Cogent, was created in the 1990s to root out organized crime from the commercial waste industry and wholesale markets. By keeping tabs on the formerly mob-controlled waste industry, BIC aimed to stem corruption and violence — and stop haulers from overcharging customers for the waste they picked up, as was once common, by setting maximum rates for pickups by volume and weight.
Liz Crotty, the commissioner of BIC, testified on Monday that Cogent had “put themselves under our lens” through its alleged misconduct. But Abreu was unsatisfied with how little Crotty was willing to say about the still-open case.
“It’s hard for me to come away with this that BIC is taking this seriously, given the history of violations here,” he said.
The complaint document against Cogent, obtained by Crain’s, accused the company of overcharging customers in 4,764 instances from March 2020 through December 2022, adding up to $193,000. Cogent was accused of improperly charging credit card fees, asking for rates that exceeded the amount of waste collected, and simply charging more than the maximum allowed rate.
David Biderman, a waste management consultant, in February called the extent of the violations “highly unusual.”
The case must still go before the city’s Office of Administrative Trials and Hearings, and BIC could end up settling with Cogent for less than the $48 million that the charges would add up to. Vermillion, the Cogent spokesman, previously told Crain’s that the company “takes this matter seriously” and expected to resolve the charges.
Even before the latest allegations, Cogent had paid the city more than $500,000 in fines — the most ever paid by a private carter. Most of that cost came from one settlement paid out in April 2023, which was not detailed in city records.
The commercial waste zone program, supposed to be implemented by 2021, has been delayed as the Sanitation Department worked to avoid imposing onerous new costs on small businesses being served by new haulers. Tisch testified on Monday that the timeline imposed by the 2019 law had been unrealistic to begin with.
She added that the Sanitation Department is proud of the price structures it has secured through its contracts with the 18 haulers, with multiple haulers pledging to charge less than the maximum allowed by BIC.
Antonio Reynoso, the Brooklyn Borough President who helped design the commercial waste reforms as a City Councilman, argued at Monday’s hearing that the Sanitation Department is giving too much weight to pricing compared to other goals of the 2019 law.
“After hearing testimony from DSNY today, it seems to have been a price reduction legislation more so than a worker safety and environmental justice one,” he said.
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Nick Garber , 2024-06-03 20:31:36
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