Busting the Plastic Trust

After a high stakes antitrust investigation that included coordinated raids by the Federal Bureau of Investigations (FBI) and the Royal Canadian Mounted Police, the Justice Department announced that it had broken up a conspiracy to drive up the price of plastic cups and glasses in the $100 million-a-year disposable plastic dinnerware industry.

Two company presidents and a corporate vice president were indicted in Philadelphia in early-June 1994. Four other executives and three companies were named in separate charges. The companies produce over 90 percent of the plastic dinnerware used in the United States.

The Justice Department charged that executives of Plastics, Inc., of St. Paul, Minnesota, Polar Plastics Manufacturing Ltd. of Allentown, Pennsylvania and Comet Products Inc. of Chelmsford, Massachusetts secretly telephoned and met with each other to further a conspiracy that lasted a year, from December 1991 to December 1992. One meeting took place in Montreal near the headquarters of the parent company of Polar Plastics.

Two executives of Polar Plastics, one from Comet and one from Plastics, Inc. agreed to plead guilty to a price-fixing conspiracy in violation of the Sherman Antitrust Act. Comet agreed to a fine of $4.2 million. Plastics, Inc. agreed to pay $4.16 million. Polar Plastics, which was additionally charged with conspiring to fix prices in the $100 million-a-year disposable plastic cutlery industry, agreed to plead guilty to all the charges, but the amount of a fine was not determined.

In a separate action, a grand jury charged Clement Izzi, the president of Comet, Robert Westbrook, the president of Plastics, and Warren White, a vice president of Plastics, Inc., with one count of conspiracy to fix prices. Westbrook and White were accused of conspiring to defraud Delta Air Lines, Inc. and the Bunzl Corporation, both large purchasers of disposable plastic dinnerware, by scheming to raise the price of certain disposable plastic dinnerware products sold to them.

Lockheed's Dirty Deeds

Lockheed Corp. and two of its executives have been indicted for fraud and corruption involving the $79 million sale of three C130 transport planes to Egypt in 1989, the U.S. Attorney's Office says.

The indictment, handed down by a federal grand jury in Atlanta in mid-June 1994, alleges that the company, through a number of high-level executives, violated the Foreign Corrupt Practices Act, conspired to commit wire fraud and impeded U.S. Defense Department agencies.

Allen Love, identified as Loekheed's Middle East and North Africa sales director, also was indicted for perjury.

Suleiman Nassar, described as the Geneva-based regional vice president of Lockheed Corp. International, was named as a defendant as well.

Federal authorities allege that the company illegally paid more than $1 million to Egyptian Member of Parliament Leila Takla in exchange for her help in securing a $79 million Egyptian government contract for Lockheed. Lockheed executives then made up false documents to conceal the identity of Takla, who was described in company records as a "consultant."

"Lockheed emphatically denies the allegations in the indictment and intends to vigorously defend itself against the charges," according to a June 22 company statement. "We firmly believe that any prosecution of this case is without merit."

Dismissing Safety

ARCO discharged a quality control inspector at its oil operations in Alaska after the inspector refused to circumvent the quality control process, the inspector charged.

ARCO is field manager for its Exxon and British Petroleum (BP) partners on their jointly-owned Point McIntyre operations and for its Exxon partner on their Prudhoe Bay operations.

The quality control inspector, Richard Acord, said he was discharged because he would not agree to violate quality control procedures nor accept falsification of documents to cover up the use of used and salvaged valves, flanges and other components for installation in North Slope pipeline systems.

Project Courage, a public interest group started by oil industry critic Charles Hamel, revealed in November 1993 that ARCO, Exxon and BP adopted the practice of using components salvaged from old, replaced feeder lines to meet budgetary restraints.

"As you are aware, valves and flanges are the most critical components of the well head to flow station pipelines," Hamel said in a letter to House Energy and Commerce Chairman John Dingell, D-Michigan. "Use of salvaged components of unknown, unrecorded origin and indeterminate condition not only is a violation of [federal law] but endangers the work force and the pristine environment of Alaska's North Slope."

Acord, in an affidavit submitted to Dingell's committee in mid-June 1994, said he was employed with Houston Contracting Co. as a quality control inspector on the North Slope. "I was requested to move to the ARCO side of the North Slope following an industrial accident that had left a young man (22 years old) dead," Acord said.

There, Acord started working for Veco Construction. At Veco, he noted "numerous code violations ... which could have a devastating effect on the environment and safety of workers on the North Slope."

But he said that he was admonished by supervisors from ARCO for raising these issues. The engineers were running the project, he was told. "We can throw our arms up and do what ever we want to do, write a report saying we don't agree, it's not to spec, it's not per Code," Acord said he was told. "If [the engineer] says put it in, it's going in. ... We cannot prevent them from doing it unless someone is going to get killed out there."

ARCO could not be reached for comment.

- Ben Lilliston