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Feb. 2000 - Updated September 2005
What do the following companies have in common?
- Waste Management, Inc.
- Chemical Waste Management, inc.
- Chem Nuclear
- The Brand Company
And others. They have Dean Buntrock in common. Who the heck is Dean? Well, for starters, an issue of Fortune Magazine last year shown his face on the cover with a feature story about incompetent CEO's.
So why should we care about poor 'ol Dean? Because he is an example of what is wrong with corporate America: the lack of accountability of CEO's and senior management. Because he's stinking rich, and he got that way despite Waste Management Inc (WMI) going down the tubes under his "leadership". And according to the Atlanta Constitution, Thursday, February 24, 2000, page F2; that he is now suing for $12,000,000 in pension. His pension. Alone. That's right; he claims his pension is worth 12 million dollars. Mind you, this is the tightwad who capped his employees salary raises to about 4% while he was claiming that the company was growing and making great profits, and while he was making over $6,000,000 a year in estimated wages and other compensation, and who could afford to donate $26 million to his alma mater (some tiny, religious school in the midwest, St. Olaf College, as I recall - see here for the "Buntrock Commons" editorial:
Not to mention quite a few environmental fiasco's under his management, like the explosion and consequential shutdown of the Chemical Waste Management Inc., Chicago Incinerator (circa 1991).
Not to mention having a facade and entryway of imported Italian marble installed at the 3001 Butterfield Rd headquarters, at a time when the company was denying the purchase of simple things like inkjet computer printers because of a "tight budget".
Not to mention his comings and goings by landing his company helicopter on the roof; taking stretch limousines. Colleagues who visited his home told me about the 6 car garage with a rotating turntable (so he would not have to ever back up his car to get out of the garage or driveway).
And "environmentalist"? Heck, the guy had a stuffed bear outside his office in Oak Brook. A stuffed bear, for cripe's sake! I passed by it almost every day!
How did he get into the environmental business? The old fashioned way - he married into a wealthy family, Dean married Elizabeth Huizenga, cousin of Wayne Huizenga - founder of BlockBuster and owner of the Dolphins. See here for more on that: http://www.forester.net/msw_0007_history.html and more on Wayne at http://www.corporations.org/wmi/huizenga.html ) After this he is reported to have divorced her to marry his secretary, Rose. "Reportedly" because it is hard to find proof of this one; they don't print this kind of stuff in the "engagement and weddings" section of the newspaper).
How do I know? I was there. I used to be the environmental manager of the world's largest hazardous waste facility in Emelle, Alabama, then promoted to HQ in Oakbrook, before being promoted to London (probably to get me far away, they didn't like employees who fought for ethical corporate behavior) .
I watched as, under Dean's autocratic, dictatorial, insular leadership, the company went down the tubes, while they played games with the figures and press releases to make it look like WMI was growing.
So is this just sour grapes from an employee who didn't get his printer? Nope. there were a lot of great people in WMI and it's affiliates. People who wanted to make a difference. Ethical people who wanted to make the environment cleaner and run a decent business. From the guys working in the bottom of a hazardous chemical waste landfill in moon suits on a hot summer day in Alabama inspecting containers, checking labeling, reading the monitoring equipment, operating the heavy machinery to countless chemists testing the local water in the lab, clerks, and support staff. Whole families worked at facilities - moms pregnant with children in the office, while dad was out inspecting incoming shipments.
But the efforts of these 88,000 plus people didn't ultimately matter much, because senior management, headed by Dean and his cronies, wouldn't listen to anyone. They knew everything! Arrogant, paternalistic and greedy.
Their mismanagement led to WMI's stock sinking ever lower, from a high of about 45 in 1992 to less than half of that a few years later and 15.75 today (Feb 2000). And many people were laid off; usually in a cruel fashion (right before Christmas, while pregnant, after receiving glowing reviews, after just moving house because the company relocated their job, etc). Meanwhile, Dean and his buddies at the top kept patting themselves on the back, getting richer and shoveling out pure crap to the press and market analysts about how well the company was doing and the "growth".
Ultimately, Waste Management was bought out by USA Waste, which then began an even more vicious round of layoffs and finally sold the shell that was left to Vivendi, a French firm. And they have since sold it.
And Dean has the balls to now say to the public, including more than 60,000 (est) former employees, that he deserves $12 million as a pension. My pension was around $3,000 a year (after more than 6 years there) and I'll bet I could find more people who would say I made a bigger positive contribution to both the environment and the company's bottom line than Dean did.
In fact, most of those 60,000 former employees could probably say that. They were good people, doing the best, most ethical job they could, while working for a company that did NOT care about the environment, only the compensation packages of the senior vp's and above.
It bothers me that the reputation of the company I worked for, and the profession I was in, has been so sullied by the actions of a few, that our good work is negated. Yeah, it's just my opinion, but I know that the people I worked with did a great job for as long as the company let them, despite you, Dean.
You didn't build the company. They did - despite you. They deserve a cut of that $12 million, not you.
Update August 29, 2005 - The trial has concluded!
The defendants agreed to pay $30 million as a settlement.
Read about it on this page!
Update April 2002 - Here it is, just after Enron and Arthur Anderson has come to light, and all I can say is; it's nothing new, Waste Management, under Dean Buntrock, should have been sufficient warning! A couple of years after I wrote the above editorial (Feb 2000), I see the SEC is catching up with Mr. Buntrock! They indicted him! - see here for the official SEC indictment - According to the SEC indictment - I am now quoting it::
"The complaint alleges that the defendants played the following roles in the scheme:
|Buntrock - the driving force behind the fraud. He set earnings targets, fostered a culture of fraudulent accounting, personally directed certain of the accounting changes to make the targeted earnings, and was the spokesperson who announced the company's phony numbers. At the same time, Buntrock posed as a successful entrepreneur. With charitable contributions made with fruits of his ill-gotten gains or money taken from the company, Buntrock presented himself as a pillar of the community. For example, just 10 days before certain of the accounting irregularities first became public, he enriched himself with a tax benefit by donating inflated company stock to his college alma mater to fund a building in his name. He was the primary beneficiary of the fraud and reaped more than $16.9 million in ill-gotten gains from, among other things, performance-based bonuses, retirement benefits, charitable giving, and selling company stock while the fraud was ongoing.|
|Rooney - in charge of building the profitability of the company's core solid waste operations and at all times exercised overall control over the company's largest subsidiary. He ensured that required write-offs were not recorded and, in some instances, overruled accounting decisions that would have a negative impact on operations. He reaped more than $9.2 million in ill-gotten gains from, among other things, performance-based bonuses, retirement benefits, and selling company stock while the fraud was ongoing.|
|Koenig - primarily responsible for executing the scheme. He also ordered the destruction of damaging evidence, misled the company's audit committee and internal accountants, and withheld information from the outside auditors. He profited by more than $900,000 from his fraudulent acts.|
|Hau - principal technician for the fraudulent accounting. Among other things, he devised many "one-off" accounting manipulations to deliver the targeted earnings and carefully crafted the deceptive disclosures. He profited by more than $600,000 from his fraudulent acts.|
|Tobecksen - another accounting expert who was Koenig's right-hand man. In 1994, he was enlisted to handle Hau's overflow. He profited by more than $400,000 from his fraudulent acts|
|Getz - the company's general counsel. Getz blessed the company's fraudulent disclosures and profited by more than $450,000 from his fraudulent acts."|
Their titles at the time:
- Dean L. Buntrock - Waste Management's founder, chairman of the Board of Directors, and chief executive officer during most of the relevant period;
- Phillip B. Rooney - president and chief operating officer, director, and CEO for a portion of the relevant period;
- James E. Koenig - executive vice president and chief financial officer;
- Thomas C. Hau - vice president, corporate controller, and chief accounting officer;
- Herbert Getz - senior vice president, general counsel, and secretary; and
- Bruce D. Tobecksen - vice president of finance.
Update May 2004 - According to FindLaw.com ( http://caselaw.lp.findlaw.com/data2/circs/7th/031890p.pdf ) the trial is now scheduled for early 2005. More details on the findlaw site through the link preceding.
I can't vouch for the accuracy of the following, but as there isn't much publicly present about Mr. Buntrock, here is what I've found:
We would love to hear your opinions - just email us a note (anonymously, is fine). If you want your opinion published, please indicate. And former WMI employees, write me if you want to be on an WMI alumni list!
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The preceding is an opinion! Take it as such. So far, the only disagreeing email I have received in the past 2 years was from a member of the Buntrock family. Isn't THAT a surprise...