Refuse service settles
‘whistleblower’
lawsuits

The competitor who filed the suits
will get 20 percent of the money

By Jim Witty
Star-Bulletin

Honolulu Disposal Service has paid the federal government more than $823,000 to settle a pair of "whistleblower" lawsuits filed by a rival refuse hauler.

The competitor -- Oklahoma-based Red River Service Corp. -- will receive 20 percent, or about $164,000, of the settlements.

The suits alleged that Honolulu Disposal overstated the amount of refuse collected from Army bases and military housing areas on Oahu by about 318 tons a month over a five-year period, said U.S. Attorney Steven Alm. That resulted in the Army overpaying Honolulu Disposal by $411,993 over the five-year contract, Alm said.

The federal government settled for double the damages, Alm said. Honolulu Disposal Service attorney David Lum said the company denied wrongdoing in the case.

"It's agonizing," said Lum. "We could have used the money for something else. (But) it's risk analysis. This is the right thing to do so we can move on."

According to one of the suits, Honolulu Disposal Service billed the Army for collecting an average of 677 tons of refuse each month from housing facilities at Hickam Air Force Base between

October 1987 and September 1992. The following month, Red River took over the contract and reported collecting "substantially less" garbage every month, despite similar contract terms and conditions including occupancy rate, frequency of collection, the number and location of collection points and the type of refuse and receptacles, Alm said.

Red River filed the suits against Honolulu Disposal and notified the U.S. attorney's office, which took over prosecution of the case.

After a yearlong investigation involving the Office of the Army staff judge advocate, the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, the Army Audit Agency and the Army Pacific Internal Review Office, the out-of-court settlement was reached.

"Each case we do brings more referrals," Alm said. "Unfortunately, I think there are more cases out there."

Alm has devoted one full-time position within the U.S. attorney's office Civil Division to affirmative civil enforcement.

"The U.S. attorney's office intends to vigorously pursue criminal prosecution or civil remedies in cases involving fraud against or the overbilling of the military and other government agencies," Alm said.

In a similar case concluded last November, U.S. District Judge Alan Kay ordered Refuse Inc. to pay $3.7 million for overbilling the government for trash collection and dump fees at various military bases. That suit was also brought by Red River, which received 20 percent of the settlement.